Texas tends to favor landlords in these cases, but follow the legal process exactly—any misstep could delay things.As for protecting against retaliation or property damage, installing security cameras (if you haven’t already) to monitor common areas might be worth it.

@Ilia Zakharav, There's no problem in selling individual units and 1031 exchanging them as individuals. 

I know this is above and beyond what most municipalities require, but being fair will make the whole process easier.Additionally, a new landlord can reduce the 60-90-day notice by offering more moving assistance (cash and/or labor) if they move sooner rather than later.

This can be especially helpful if you’re uncertain about repair assumptions or costs.If it’s a contractor you’ve worked with multiple times, involving them early in the process is often beneficial.

Depending on the volume you would be submitting, find a company that does not have high monthly minimums and can walk you through the process if this is your first time using.

Personally, I airbnb half of my house, individual rooms, and stay nearly 100% booked.

@Shawn Questa I agree with you that there could be some opportunity here, but personally, with that little equity in the property, I'd wait for the pre-foreclosure process to start and  perhaps you can do a short sale (though I don't know the details on how that's handled in TX).

. :)We definitely want to invest in true vacation rentals as well but this will be a good learning process with not as much risk to start.  

If  you chose to sell, there are a couple things you could do to proactively make the 1031 process much easier. 

That being said, the vast majority of mortgage products available (primarily DSCR) to LLCs are still going to consider your personal credit in the underwriting process.