To avoid similar rip offs in the future, the investor needs to bear responsibility for vetting any investment offering they're contemplating, or if not just leave your money in government guaranteed investments (like FDIC insured bank accounts).  

Quote from @Erick Pena: A "good" rental property is one that covers all expenses (mortgage, taxes, insurance, maintenance, property management fees, and any other costs) and still leave a surplus (commonly referred to as cash flow).Calculate cash flow as: Cash Flow = Rental Income − Operating Expenses − DebtThere's much more to it, but that's the basic idea.

Insurance and LicensesThe Subcontractor agrees to maintain:General liability insurance of at least $[Insert Amount].Worker’s compensation insurance (if applicable).All necessary licenses and permits required by law.6.

You'll want the rents to at least cover the monthly principal, interest, taxes and insurance (and HOA if there is one).

File lien if you find assets. (3) File wage and bank garnishment if you have bank account number and current employer. (4) In most cases it is impossible to find current whereabouts of the tenant to serve any papers (garnishment papers)(5) We have started asking for car insurance cards to get information on the car, the only asset most tenants posses.(6) We have not been able to find new address of any of the evicted tenants.

Their lease is 6 month term with a same rate month to month however, their insurance states the rebuild of their home and fire investigation efforts are going to take 12-18 months. 

We're new to real estate and would appreciate advice on our current home in Texas and our future place in Oregon.We love our house in Austin and aren't ready to sell, but as a long-term rental, it would yield (from what I understand) negative cash flow, covering principal and interest but not taxes and insurance.

-Paying all the taxes, maintenance and insurance-Finding a renter-Worrying and wondering each month if the tenant will pay on time-Fixes/repairs-Other? 

If I were you, I'd pass on this property and look for something else (and I suggest a 3 BR) under $80 that you can put a little rehab into, unless insurance pays your family member a bunch of money and they accept a much lower price. 

It’s cash flowing about $50/month after everything (PITI, flood insurance, home warranty, excess liability & termite protection) - if I got ride of termite it would cash flow $125.