I personally would not reimburse them for the alleged damaged clothing. 

There was a post in my local CT Realtors group where a seller purposefully (allegedly) tried to cover up fire damage.

Note to readers: Steve Morris (in the above comments) is making baseless and defamatory claims in alleging that my article has plagiarized from other sources ("cut-and-paste some stuff I've read multiple times here and elsewhere").

I purchased a home from TAX sale and the property is occupied by the cousin of the previous owner who died a while back, allegedly the care taker.

A previous property management firm I worked with had a co-founder allegedly steal all the money in the escrow accounts and abscond with it to Chicago.

There is too much trust being tossed out in option #2 that can't be returned in alleged CoC and ROI.

Since the first 1/2 of the money is already allegedly gone, you or the "investor" are pretty much in a position where getting it back so that you or the "investor" can walk away is not a viable option.

Tenant alleges he pointed out "traces of mold" during walkthrough but we have no documentation of that conversation.  

I just added your numbers up and it totaled $178K.If you title the property in your name, you face equity skimming allegations or worse.If you take the property subject to, you face acceleration of the note.

I sent some solid comps and a spreadsheet of area values as well as some photos of the alleged water front area.