The saga continues...our relationship with the PM company is over but they are now withholding our $350 reserve money with no outstanding bills.

At least you're in the right place to get a good answer, there are some great people on here as well as some outstanding information and guides for everything.

I was sorry to see her leave the unit however it was a very small two bedroom apartment and I understood her reason for leaving.I hold deposits for 45 days to make sure as I transition from one tenant to the next that the unit is truly in good condition and to ensure there are no outstanding water bills with Columbia City Utilities.

While this is not an outstanding return it seems decent, so I am at a loss as to why this property has been listed for months now.

Most cards charge 2 to 3% of the outstanding balance as a minimum payment. 2% of $100,000 is $2,000/month, not sure where you can buy anything for that amount of money that will cash flow that much.

Are there any outstanding/illegal issues I should know about?

We live and work (flip) in the metro area of Minneapolis MN.Over 70% of the homes we work on are from the 1910’s to 1950’s.Many of our homes have outstanding woodwork, original tiled bathrooms, and hardwood floors that just need to be brought back to life.For us, we have to remember that these houses are not ones we are living in, but are doing for resale.With this mindset, we might make a definite different decision on what we do with the house compared to if it was our personal house.

There is an excellent probate thread here on Bigger Pockets.Also, Mike LaCava posts regularly on Bigger Pockets on House Flipping and has an outstanding (no phony GURU pitches) House Flipping website. 

Outstanding Job!

The tenant is not.Your lease should have something in it stating that funds received are first applied to outstanding funds owed (in this case late fees).You might consider changing the method of rent collection.