A good in house referral and call rotation system is going to be a big thing for you as you try to establish yourself. 

I said it was fine, since they kind of put me on the spot, and it does look ok, though now the apartment has four different types of flooring.Our relationship has become somewhat strained during their move-out process, mostly due to her not immediately getting her way in any given situation (e.g. she tried to insist that I drop everything to come do a walkthrough with her at 6:00pm on a weekday and I refused).

You can certainly rotate it every year if you want to...but you will never cashflow in that scenario - even if rates decrease. 

I guess I should also note that they are renewing their lease on a month to month basis so I don't want to have a strained relationship with them; even though all I'm doing is enforcing the lease.

Sort of like doing business with family... it could go well, but it could also strain that relationship and probably isn't worth the risk.I'd see if he agrees the job is shoddy and pay him half, AFTER he cleans up his scraps.Next time use a clear SOW as well, that could help.

@Kevin Phu  See below, not sure why the upload rotated the pics.  

The banks/government, at least in my area, are hush-hush when it comes to announcing it at the sale (think this should be illegal but just my opinion).I'd HATE to see anyone lose tens of thousands of dollars and cause a strain on their relationship over one mistake so that's why I'm pleading those who know how this works to chime in.Can anyone give any input on how it should be handled?

I'm a little concerned with starting up a Partnership LLC mainly with all the formalities and potential issues that could cause a strain our friendship.   

The addition of housing units would put strain on the resources available for water as well as sewage.

I already have a list of two dozen candidates (SFH/multi/land) and have been trying to find an agent who has access to REO or otherwise unlisted to expand the list.Definitely aware of the debt reorg in progress and the overall government strain & demographics, but PR is also one of the few places where I'm finding both great value, a great population, and a gemstone of a location.