You want to be in B class or above neighborhoods unless you have an absolutely steller prop mgmt company that can handle the tenants of C class.

How would you have handled this situation, and is there anything we might do differently in the future to help manage tenant's expectations from the get go?

google good attorneys that handle real estate sales in mason county or the optional route is to hire a real estate agent to handle both sides.

If he lives out of that City you could write him/her a letter of your interest and how you could pay the tax bill as part of your offer.In the meantime, you might ask the Tax Assessor clerk who handles the tax foreclosures and ask them if a mortgage company is involved. 

When selling, you can put on the market to see what it would fetch if one of you wants to sell and that would be the buyout amount required to prevent the sale from happening and buyout equity from the other partner.3) How cash flow will be handled.

We don’t pay her anything as she can handle the mortgage loan by herself and we don’t live with her.

The escrow company charges around $100/year and then they handle the property tax and insurance payments, late fees, etc.We put about 10% down, which basically covered his commissions and closing costs/taxes.

If your agent does not handle business insurance you may want to contact one that does.

Sounds like she was a lot to handle.

I have actually used Roto-Rooter to handle some items.