The owner had terminal cancer and he wanted me pay off the loan on the property that was about $100,000 with no other costs and he was going to give me $45,000 at the close of escrow.

I wouldn't let these criminals (they are stealing) ruin any more of my health or mood.I had a tenant that literally ripped my entire house and stole everything...

And property tax's are about 1/3 of what they are in  Texas so when you run all the numbers cash flow can be HIGHER in Vegas  especially when you consider NO thunderstorms bad clay soil ruining your foundations etc.. 

his only clean way out is a short sale, which ruins his credit.

You do not want to ruin a relationship because of some unclear agreements.

His attitude towards his long hours was ruined, he grew to resent the weekend assignments (a lawyer doesn't get overtime.)  

well this about ruined my day :)  

We work together at Memorial Sloan-Kettering Cancer Center in Manhattan and a fellow colleague who is also interested came along for the ride as well.

If the fee is big enough that it makes you worried that it will ruin the deal then do a double closing instead.

I am a newbie with real estate investing actually I am starting over after making novice mistakes landed me in bankruptcy court with a ruined credit profile...most of my purchases were out of the state.