Otherwise it's just gambling anyway.

Gambling.  

Of course the contractor could than get draw #2 on day 1 when they arrive with labor and/or materials per the draw schedule which should be part of the contract and itemized out with specific progress payments and what the payments are for (should be based on completion of specific tasks).If you continue your business with these gambles, do not be surprised when you get burned, you have been warned many times in this thread.

What you don't want to do is gamble ALL of your college savings and then end up without an education nor real estate.

Are I-buyers a menace or just convenient scapegoats?

Besides of course providing the highest convenience to the colivers like you are explaining perfectly. 

It is basically a gamble.

At the time I said no because they're not that convenient of properties for me and they provide good cash flow for her.

And if you fail to do this and get stuck with a bad investment (gamble), you can't blame any one but yourself.

If you are willing to gamble your earnest money, then that is fine.