What precautions should I take or what tasks are needed to be completed when buying directly from another investor without a real estate agent?

This was a tragedy, but you have to balance going on with your life with precaution.  

I don't see that as a bad thing, with precautions taken to ensure amicable splitting down the road. 

Next time make sure you have a valid rental agreement in place that meets your needs and an accurate property condition report from the time of tenant move-in or for the later point in time when you purchased the property and took over property management.I agree with @Mark B. about precautions to take when signing leases.

What precautions should we take in this partnership?

What precautions should I take before doing the next one?

As stated earlier you can also get the legal description from a previous deed, which should match the title commitment.My deed references a vendor’s lien so that’s what I use.I don't believe referencing a vendor’s lien in the deed is crucial, especially on a "friendly" loan, but for a third party loan from a traditional lender it is a separate safety precaution to clearly show on the deed.

PLEASE take any necessary safety precautions while showing homes or sitting open houses.

Then install the original floor over it, and to top it off as a precaution thick carpet padding plus the carpet, yes looks like this just got expensive.

I would add one additional precaution, you might consider making the loan commitment contingent on the new tenant not only signing leases and delivered checks, but also having moved into the the property.