But you also could lose his motivation to show up and do the work. 

Everyone's going to be mad about it, the buyers wasted everyone's time, the agents wasted their time (and won't be paid), and the home owners may suffer the most by losing their home to foreclosure which will follow them for years. 

Should I hold on to my rental and keep saving for a flip though it may take a year and I’ll lose the deals that are currently on the market?

I can't lose my money as it is invested in the property.

- Would you rather buy something already renovated or mostly renovated and lose out on most if not all of the "value-add" but not have to deal with permits, contractors, and the cash outlays and stress involved with rehabs, or would you rather buy something that needs work and "make it yours" and deal with renovations?

You will lose over 33% of your NET profits. 

This way if you ever sell your first property, you don't lose all your working capital. 

Ask them if they're okay losing all 100k.

Convince her to lose the dog and cat, buy her a one-way Greyhound ticket to Columbus, Ohio.

The first 2 with one you do not have your property under contract yet and the other the property is under contract but your buyer can still back out of the deal and doesn't have a bunch of non-refundable money they could lose (skin in the game).