Do your due diligence and call references, contact employers, meet the applicant, etc.

If that is the case then that is considered cost of doing business and I would advise that should be calculated in your costs/returns you provide to the investor.IF you are referring to the investor who is the borrower - then I would have included that cost in the loan agreement.

I am not from real estate background and have been referred to bigger pockets by friends.

Their salesman (Gregg Poirier) was very easy to get in contact when I was considering investing.

Makes for very easy updating.As for out-of-state, @Daniel Hyman is correct that any competent tax preparer should be able to handle different state returns using easily available resources. 

Is the property & tenants mostly easy to manage or is it taking up a lot of your time?

@Stephanie SelbyRecommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.Also, encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.

BRRRRs and Flips are not as easy to come by in Fredericksburg as they once were but still doable.

Call 3 references:  Verify that they work there, or that it is an actual person by asking where they work first, and don't mention who you are until after.  

If his landlord reference for the past five years is good, that would weigh much heavier than his eviction.Based on what you've shared, I think this is a low-risk situation, and I would probably accept them with a deposit equal to one month of rent.