Familiarize yourself with the Fair Housing Act, which prohibits discrimination against people with disabilities, including those recovering from substance abuse.

LOL.But hopefully if market is recover they can perform better.

In order to make a profit, you must first recover all of your cost. 

Reviews are everything, and a few bad reviews early on because you didn't have a comfortable bed or were missing kitchen supplies can tank your listing for a long time before you're able to recover. 

It is not "funny money".Just for giggles:Mortgage fraud is covered under the 2009 FERA (Fraud Enforcement and Recover Act).

How can I still recover what she owe me? 

Total I recover in cash would be around $195k after paying the bank loan and real estate fees.

Tax and insurance: have to pay those for the property time to recover investment is 20 years assuming 1k cash flow - paying cash.I would love to hear your thoughts and experiences with either option.

Probably not the best time to invest in hotel assets until economy recovers and there is some relief in rates.

Now you've lost 4 months of rent you are UNLIKELY to ever recover:(So, yes, hire an experienced landlord-tenant attorney.