But if you have dealt with this investor before and it was legit then I would proceed but with big time caution, for sure. 

no it was legit I put it up for sale with an agent  unfortunately  I didn't do enough research on market conditions before. 

Seems legit until you actually check the facts of the home. 

Quieter neighborhood, closer to work, many other legit reasons of why I am moving - besides the fact of saying "I want to move because I am an adult and house hacking / building a multi fam portfolio while doing so is awesome!"

Not only do you have numbers for financing you are also endorsed by a legit lender and a pro bono BPO.

It's so hard to know which one's legit!

I feel pretty comfortable with how the process works just want to get some input on where people stumble in the beginning whether it be the contract being wrong or how do we verify if a cash buyer is legit and most importantly, how I can get the money into my pockets.

The larger home would probably sell for something in the $200-$250,000 range, depending on exactly what the build will be.The owner's story seems to be legit.

How do we make sure this person is legit and not an internet scammer before we hand over a hefty deposit?

If I could cash out 95% as an O/O that would be legit.