Ants, spiders, flys, and other ordinary pests are often brought in by tenant behavior, so it's reasonable to expect them to handle with removal.Bed bugs are 100% the tenant's fault because they do not travel from home to home on their own; they have to be brought in.

I would start by setting expectations that you will likely not be able to net as much as you would if the property were vacant and turnkey. 

How much time and money should I expect the eviction to cost?  

Quote from @Kevin James: Do you own AT&T?

My question is what guarantees should I expect before paying? 

Put the capital in a low-risk instrument (CD, t-bill) that will preserve as much capital as possible even while making your mandatory (5%?)

It depends on what you are looking for from the investment and what your expectations are which I didn't see above.

I don't consider someone always late but doesn't damage the house a good tenant; I expect the house to be undamaged PLUS the rent is always paid on time.

Even if they couldnt offer the service to complete the form i would expect them to make me aware i needed to fill it out in the first 90 days as i am finding out now.

If we buy this loan, we need to have a thorough game plan on how we are going to be resolving this and understanding these dynamics is key to managing expectations and protecting investments.Sounds like a deal more for someone that buys partial inheritance estates and spends years piecing it together than a note investor.