The proceeds are $140,000. 

You may want to read up a bit on this topic before proceeding to make sure you understand the key differences.

But they typically abscond with the rest, squandering it on personal expenses or high-flying life styles.COMMENT: This is common for any type of fraud.They may also use some of the proceeds to support an elaborate "Ponzi" scheme in which money coming in from the sale of new notes pays the interest on older notes.

So, I wanted to get your advice on how should I proceed based on my goals.I'm pretty much starting out in the REI industry but have been educating myself for the past 3 years, listening to podcasts, masterminds, meetups, etc...

I would proceed with some caution. 

That in itself is what I think will lawfully determine this.In the end, the amount of time needed to simply go through proceedings for a months rent, and then try to collect it from the landlord isn't worth it in my opinion. 

I am wondering how to proceed to acquire more properties. 

If that's 25 dollars or 300 that's entirely up to you provided you comply with the law.2) You could pull the equity out in a cash out refinance, and use the proceeds to purchase another property and keep both.

I realize a sample of one is real small and that she did minimal research before proceeding but she is so far negative on this ADU conversion that even with better contacts and research it would still be negative. 

I've been there, and I felt the same way.Or you can give them an ultimatum, and demand payment, or begin proceedings to evict.