My plan, after I accumulate enough property, is to refinance certain properties each year and collect the tax free "income" from that property and enjoy life. 

Let them get a judgement and try collecting on it..ambulance chasing lawyers...forget it.

It was a duplex and they were collecting the rent but not paying the mortgage.

I suggest you be sure to give the good faith deposit to either an attorney or the settlement agent, never to the seller.I'm a little concerned that the seller is your neighbor. 

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

It's relatively easy to sell land with owner financing, and so far I haven't had any trouble with collections.

They likely collected these upfront to determine the best loan product (likely wanted to compare with a full doc loan).

If there are common areas in the commercial property, then sure you would need to do the accounting regarding who pays what and what's collected among the various tenants. 

Without knowing how long your process takes in your state, the best I would do would be to offer to loan her the money at some interest rate, and still follow through on collecting everything she owes.

(Agreement with your client that grants you the authority to collect on this alleged debt.)