That just seems cost prohibitive to have a monthly obligation "just" for this one use.Thoughts?

Your tenant and you (via your PM) have a contractual obligation to one-another which has been breached, so you go after the tenant and then its their responsibility to go after the 3rd party who reversed payment, assuming that person was under some sort of obligation to pay the rent via an agreement between  the tenant and that 3rd party.

@Wayne Brooks yes I am aware that contracts state its the sellers obligation to deliver clear title.

Sometimes I might find something on Zillow and Corporate Housing and we have rented from property management groups as well.

@Matt WardWith $1mil you will give you 2 choices Choice 1- Be independent: You could buy a single tenant building around $3 to $4mil with a long term national retailer that pays NNN with a corporate guarantee for 10 to 15 years This will give you easily 10% cash on your cash plus principal reduction and no tax due to depreciation etc so you could be making a clear $100k a year with no work Problem is what happens 10 to 15 years later if Tenant does not renew?

I will finance and GC the project myself, but I am not sure what the best corporate structure for an accounting stand point is for what I want to do is.Should I register the:- GC firm as an LLC or Inc?

Please note that you are obligated to pay back their 401k (regardless of the performance of your real estate investment).Per the loan offset rules that went into effect with the 2018 Tax and Job Act: if you leave your job and the loan is current at the time you leave your job but then the loan goes into default because you left your job, you will have until your tax return deadline (including any timely filed extension) to make the loan current by depositing the outstanding balance into an IRA (and thereby avoid the taxes and penalties that would otherwise apply).If you are self-employed with no full-time employees & you can rollover the funds, you could set up a Solo 401k, rollover the funds and take a 401k loan from the Solo 401k. 

Create a "personal captive" Qualified Opportunity Fund (needs to be a partnership or corporation -- not a single-member disregarded entity). 

A deep conversation is needed to understand all the facts and circumstances.(3) If the parents transfer the house back, the parents will most likely have a gift tax return obligation and use some of their gift & estate lifetime exclusion.Worst case scenario is that your fiance would owe capital gain tax on the full amount of the gain if you two were to sell and use the equity for a new home. 

Are we legally obligated to return their full deposit?