I'm an agent, so my PoV may be a bit skewed, but allow me to explain...

@Louis Davis thank you for the help, could you please explain what the due diligence clause does for me?

And yes, that’s exactly how I explain it to them.

I hope to find time later to explain why it is misleading.

These guys explain it well:http://www.retirementdictionary.com/definitions/qualifiedhsafundingdistribution

@Jeff Adams thank you for explaining leverage I felt like it was too stupid a question to ask!

Too many new investors are willing to take grandma's money because it's cheaper for their very first property and then a few months down the road are trying to figure out how to explain to grandma how things didn't go as planned and they can't pay her back or grandma is calling them every day to ask how her investment is going.

That explains why the car has no issues with it and the string can hold it.

Ah, and then I must look at the larger picture.The month to month rentals need to sign a 6 month lease. 6 months is enough time for you to know if you wish to keep them, and it keeps cash flowing while you recover from this deal, and prepare for the next.I would have a sit-down with the tenants to explain that you purchased the property as an investment, and desire a profit.You have a lease with you, and a notice to vacate at the end of the month.

When asking for proof of giving the deposit he says he paid it in cash with receipt or proof (greeeaat).I attempted explaining that there's no proof of his deposit and that it legally doesn't even exist.