Nothing amazing, but definitely a comfortable first investment. 

Again, people thought I was crazy for leaving my job for the unknown.Looking back, I often tell my friends that if I had landed a great job out of school and been offered a good/stable salary with health care and retirement options I probably wouldn't have felt comfortable making the plunge into real estate.

I furnished the common area (sofa, tv, dining table for less than $1k) and rented out all the spare bedrooms - each brought in $500-700 + utilities.

They apparently feel comfortable letting your offer expire risk wise.

I've been looking for a property for the past couple of weeks and I figure we can comfortably afford a  20% down payment on a house worth $160k.  

not sure if i am comfortable with that sorry

It's all about getting out of your comfort zone with "training wheels" with your first few deals.  

Do as they say, but if you don't feel comfortable serving papers, you can also have the local sheriff do it.  

It all depends on where you're comfortable investing.Regarding your reserves, $20K per property seems insanely high to me.  

If you plan to do similar deals with him and other investors, it probably makes sense to invest sometime thinking about the terms you are comfortable with.