Your basic insurance policy with $300,000 in liability coverage should be sufficient in 99.999% of all lawsuits.5.

Does anyone know if that is sufficient to receive that tax treatment?

There are plenty of charitable organizations, churches, and other non-profits, who would gladly write a check to you for allowing this woman to stay in her current home, or provide her with a sum sufficient to move elsewhere.

You get in at a really low cost and learn all the basics.Multifamily in LA may not pass the self-sufficiency test so that will be a hurdle. 

Were there sufficient funds remaining to cover it?

The property will also have to pass the net self-sufficiency test.

Learn all the knowledge you can and start buying houses when you have a sufficient knowledge base to not get burned. 

For example, I'd like to upgrade kitchen countertops, but it is penny-wise pound foolish when I'll inevitably need a major kitchen design overhaul that will provide a suitable layout for a modern setup with disposal/dishwasher/microwave and sufficient space. 

Your basic insurance policy with $300,000 in liability coverage should be sufficient in 99.999% of all lawsuits.5.

The earnest money is nothing more than a token of good faith that you'll hold up your end of the bargain lest you forfeit the funds.