It's refreshing to know that there are people like you on BP willing to share your journey and inspire fellow investors with the same goals without the "guru" ego or mentality.

In my opinion if they signed a lease and gave deposit to hold the property and it is clear in writing what the next steps are and they do not perform per the agreement then they have violated the contract and forfeit the security deposit because that is what was holding the property and you could have leased it to someone else so technically you could be out potential money.Now the flipside to this is you may be right all day long, but if they sue you over this you have to get legal counsel to defend yourself and deal with the headache and mental strain of battling this, probably spending way more then if you just gave them back the money and moved on.

It gets exhausting getting taken by contractors all the time, so I want that go-to guy I can count on and trust.Any referrals would be great! 

Exhaust all your resources before you make that decision. good luck

Document everything and do what you must to protect your good tenants from the mentally unstable tenant.

If you can mentally handle the risk, and your rental income covers the loans, property maintenance, and satisfactory cash flow, then you are not over leveraged. 

and exhausting lol

I grew up in the Midwest with grandparents that mentally never recovered.

That’s Chicago traffic for you… and it’s exhausting.

The only time when a personal guarantee should come into play would be when the first two sources of repayment have been exhausted.