@Tyler Jahnke  while I appreciate your calm demeanor through this whole debacle.and I understand you only invested 50k or less which you also point out was a majority of your cash.there are others who have done 4 and 5 times that or 10 times in one case and their lives are in turmoil.. everyone is different in how they handle this stuff.. some people would completely fall apart if they lost 40 or 50k.. of course your not a total loss until you try to sell there is some value there. not what you paid for it but some value..I think the issue is all those that trusted Morris and its now come out that is was just misrepresentation at the least and gross negligence at the worst or even the F word.. or P wordit is amazing to see how each of your folks that fell for this react though..

If there's clear evidence of tenant misuse or negligence, I would proceed with charging the tenant.

My hesitation is that after accounting for all of the items you are supposed to account for when analyzing a deal, the CoC return on the down payment is pretty much negligible initially.

Now, I know someone could say the cost should be "negligible" couple of hundred dollars a month, in comparison to the whole buildout budget, but still I do want to know what are the best practices out there.

As you can tell there is a large amount of money sitting there , to which has made my cash flow now negligible at best when considering ROE.

I hear ya, I think the fees are negligible but I guess it would be a option not to convert or convert portion. 

This will allow for you to pursue legal action "eviction" if ever needed for non payment or negligence as a tenant. if you rent out the basement separately but it is not a legal unit, the court will not allow you to pursue an eviction.

I had my hands on way too much as usual, and as always, the amount I saved in doing so was probably negligible when considering the opportunity it cost my in my job as a Realtor.

It's possible the tenant was negligent if they knew or should have known that the hose was not connected.

Your only recourse on the PM would be if you could prove they did something grossly negligent, like leaving the doors open.