Don't you, as the home-owner, get to release the funds in segments after they complete each phase?

And, I completely disagree that, "… it is not too far off."

@Jeremy Brown The prudent business decision is to simply evict the tenant.If your looking for other solutions then do whatever makes you feel best as none of those decisions have to do with your rental business.

It's simply not fair to the seller for you to tie up the property for a month with no compensation if you back out last minute.The amount of money considered "fair" for earnest money depends on the area, the market, and the seller. 

The water soaked into the concrete slab the house sat on as well as had major roof leaks (been vacant and decaying since 2013 after all), since the roof needed to be completely repaired (this property was in disarray lol).

She simply didn't want to pay rent.

Cash flow is simply the icing on the cake.

After renovation is complete, we're projecting rents to be $1800.

I completely recommend the podcasts.

Once your current FHA loan is refinanced (which pays it off completely) into a conventional loan, you can go get another FHA loan.One thing that you didn't ask but I'm going to share anyway, is that FHA is for owner-occupied properties only.