It would be wise to ask an attorney in that state.She should be ok because as of now I believe real estate wholesaling is legal in Newark, NJ.

However, I appealed which took the case to a higher court and he settled the day before the trial for the full rent + all my attorney fees.

I am an attorney in NY, DC & MD and this is NOT LEGAL ADVICE.  

If you've given the tenant a discount, you've lost income.If you are going to offer a discount for a full year of rent paid in advance, I recommend you have an attorney draw up a strong clause that says the tenant forfeits the discount if they leave early. 

To learn specifics contact your local county to see what is required to claim the surplus and perhaps talk to a local tax line attorney. 

Please helpContact the district attorney/state's attorney/whatever and institute criminal charges.

The part you are missing is if that claim were to arise why wouldn’t the plaintiffs attorney simply list the deed holder in the claim?

And do you have any referrals for attorneys that work in the Pierce County incase things get too complicated as I do it on my own?

But in retrospect, should we have gone through with the deal and trusted our real estate attorney to execute according to the purchase contract?

This does not mean your investment is insured.We often hear comments like, "We invested with XYZ because their fund / syndication is FDIC insured," (nope no its not...).To avoid these kinds of mistakes, I strongly recommend you always have an attorney review the Private Placement Memorandum (PPM) with you.