I have tried everything to get the tenant to complete the assistance formalities - started their  application, filled out most, but it still needs supporting documents to be sent directly by tenant, which they are not doing and not communicating. 

Should I have them sign a formal lease?

So, the rate will be probably ~1.25% higher.Don't forget that there is another requirement about being able to carry the mortgage as if the other units weren't rented -- forgot the formal name for this "test." 

On the other hand, you COULD work out a less formal deal --- based on trust. 

I believe you must put in a formal request with the city to pull a record of permits/work completed.

@Chad U. says he filters by state:   is that to sort by judicial versus non-judicial jurisdictions, growth versus low-growth areas or some other metric?

However I see that if you can structure this deal correctly you can qualify for a long time capital gain.Tips to get capital gain treatment on the sale: A) If you have actual investment property and you are dealer: -Maintain separate book-Document intent to hold the property as investment property in Minutes or other document-Report expense as investment expense on tax return-Also use separate entities.Using controlled entity to get capital treatment on land:-it is important that the sales price reflect the property's actual FMV at the time of sale. the formalities of a sale must be observed.

He gave her 3 options: sign a new lease, cash 4 keys, or formal eviction.

Tuesday she said someone else was coming to view the property so she was waiting to submit formal documentation. 

. - The buyers signed the release of contingencies at the end of the 60 days due diligence period - Buyers didn’t perform and asked an escrow extension of 4 months which was granted against a full release of the earnest deposit - Buyer signed the release and EM was transfered by the escrow company to my account- After the 4 months period buyers failed too close again- I served a notice to perform as well as a demand to close escrow- Sent the cancellation of contract and escrow but buyers refused to sign and informally communicated their desire to recover their EM- I refused to return the EMWhile the contract is likely dead, the unfortunate consequence of this situation is that the open escrow must be disclosed to the new prospective buyers which obviously is a turn off and causes me financial damages.I talked to an attorney who thinks the contract is void and suggested sending a formal letter to the buyers from his office to have them sign the cancellationThoughts anyone?