I would rescind my offer and request some additional terms to the contract. 

I know I am ready to "make a move", but I don't know what is the most important "first" step after reading all the books, taking notes at the seminars, and being motivated from the real estate Podcast.  

I would be informing him that he owes an additional $250 above his $1600 deposit to cover the repairs.

This is an excellent place to network, build your knowledge and get motivation to get out there and do it!

Ideally, we'd like to achieve owner financing for the purchases but also have the possibility to get commercial financing.I find myself with a small but highly targeted list - owners of more than 10 residential properties - their motivation to sell is a huge unknown for me.  

He is a motivated seller and wants to sell to me.Side question: if an agent sends me a property and I want to offer seller financing, would it be the same process?

Additionally, there are some good websites where you can pay for credit checks and/or criminal background checks.

Have you tried to obtain an unsecured line of credit with your new business in addition to your loan? 

I could use a little help and motivation with keeping on track as well since this is a side venture and is not replacing my main source of income at the moment. :)If you are interested, PM me and I'll share my contact info. 

You can request additional security deposit but new laws affect how long you can keep that, I believe only one year but you will need to independently verify this.