If the old Landlord keeps it, I would consider that theft and I think a court of law would agree.If it's not too late, have the tenant put a "stop payment" on the check before it's cashed.If it's too late, notify the old Landlord - in writing - that the money rightfully belongs to you for payment of rent and demand return within XX days or you will file a claim in court.

I talked to my CPA about electing this year to be the final year to file these Partnership returns and K-1s and just move forward by splitting everything on our Schedule E's between the two co-owners. 

What are the other cost involved beside the development cost.Any help would be appreciatedThanks

I wonder though if anyone has any advice on how to get into rental properties and make it fair for all parties involved. 

Excited to get involved, learn more, and do my best to help those in the community.

At this point, the goal is to deal with the person, who is handling the transaction and try to get out whole. glad to see my guess of 5k was about right.. that's what I have personally seen on the short sales I have been involved with.. never really seen more than that.. just hoping she only paid pennies on the dollar and is not in that deal like 15 to 25k.. if that's the case I think she is going to lose some dough.

The last item was "no permit or drawings on file to duplex first floor to basement".

., and file all the tax returns for it.

There's risk and cost involved if they have to foreclose. 

If your time is worth more doing something else, then hire it out.If you have someone you can trust to do a good job.....just as good or better than you....hire it outIf you like to be involved and be hands on, then do it ....up to a point.I prefer to do everything I'm capable of myself....if I have the open time.