It basically says the residence is a nuisance due to requiring an unusual amount of police or other services.

That's an unusual rental. 

If you are uncertain of how landlord-tenant works in your jurisdiction and/or how the law can support your needs, as well as the tenant's, then consult with legal counsel.BTW... if they are sending angry texts and are angry on the phone, there must be some basis for that.

A fee structure like you mention is highly unusual.

Invested another $65k cash in renovations and just sold it for $192k.The source for either type of purchase would be from panic sellers looking to liquidate due to uncertain economic times and the aging population who are liquidating for retirement.

When I was in college many decades ago, NONE of my profs, most of whom were PhD's, had ANY real world experience in their areas of "expertise" and I know for a fact that my school was not unusual in that regard.

That being said, I am aware of the type of policy he is using (because we use some similiar programs) and it is not unusual for the banking industry.

That would be really unusual. 

Laws vary greatly from state to state, but it would be highly unusual to get reimbursed for "any rehab done" to a tax sale property if the previous owner successfully challenged the sale.  

Forget about planning for renters as that is to far in the future and uncertain at best.