Hi Bryan,I am not an attorney and this should not be considered legal advice.I don't know how they conduct real estate in New Jersey or Illinois, but based on my experience here in California:If you have a physical inspection contingency and/or a loan contingency, you should be able to exit the purchase contract penalty-free and get your earnest money deposit back.I am not seeing the grounds for the seller to sue you for damages.

The Buyer and the Seller understand and agree that the Broker neither warrants norassumes responsibility for the physical condition of the premises.IT IS NOT THE INTENTION OF THIS PROVISION TO PERMIT THE BUYER TO TERMINATE THISAGREEMENT FOR COSMETIC OR NON-MATERIAL CONDITIONS.Buyer shall be responsible for the repair of any damages caused by the Buyer’s inspections and tests;repairs shall be completed in a timely and workmanlike manner at Buyer’s expense.6.2 Seller shall cooperate in making the premises reasonably available for inspections and/or tests.6.3 Specified Inspection Period: Buyer shall have ____________ (not applicable if the number ofcalendar days is not inserted) calendar days after the date of acceptance of the contract by both parties to have inspections, environmental inspections, and/or tests completed.

As I'm not comfortable making a first-time purchase out of state without visiting the area, I decided to make a road trip out of it and to visit a handful of cities spread across a few states to get a physical feel of the markets I've got my eye on. 

While this property is not performing in terms of income, it is still possible this property could sell at top dollar with bank financing assuming the property meets the physical specs of comparable property.

Most, but not all, banks that are physically located within the state fit into this category.

So in an attempt to create a new network, meet some new folks who have more experience than I or just chat with some awesome people on the same journey, here's my intro.The name is Joseph and I just turned the big 35, I have always been a hard physical worker but I am trying to switch my mindset from physical laborer to investor.

What about using the money for a physical property (I think I need a custodian for this type of transaction?)?

They are 4 bed/4 bath units that were built to rent to specific transient (and generally fit/healthy) populations and so only have the physical space for 24" bathroom and closet doors. 

My "down payment" would be to take care of clearing it all out - the physical labor and overall hassle as they've been using the garage as storage and they don't want to sell 'as is' because they still want their stuff! 

They have been in business for 30 years, have 50,000 members, and recently opened a physical office in your back yard.