If you're looking to scale it could be worth while to sell and re-distribute that equity with the help of some save leverage. 

Im assuming that is what would catch any errors in owner distributions, deposits, profit/loss? 

I've found many properties with title issues wind up with unpaid property taxes so checking on delinquent taxes, tax deed sales and lands available for taxes might help you identify some.

For the proceeds I have to pay seller I would have to issue him a 1099 right?

Find a lawyer and issue a lease violation for other issues such as excessive noise and furniture removal.

:)I am sure this is a solvable issue with some work.

There's a good chance the issue(s) you face has already been discussed and answered.Ask questions in the appropriate forum.

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If you sell directly to a homeowner, the issue can come back on you and bite you in the a...  

I am not aware of any issues with using third-party screening services.