His negotiation was $900 for January rent, February rent and all damagesIf he does leave you have to start a small court claims (figuring out where he lives because why would he tell you if you are not sending back a deposit) for anything over.Good luck and you can make it work out.

Showing an unrealistic refinance in year 2 instead of year 3-4 will likely turn a 13% IRR deal to 16-17%.

Do I wait till the rental property is back in service to claim deductions and income?

Save, seek and maintain gainful employment (if hourly and you take time off b/c you are sick, do the paperwork to get the sick pay, so it doesn't look like you took an unpaid vacation - paperwork matters more than verbal claims made!

We recently installed a new package HVAC system for her in the property which wasn't cheap.I am wondering as her landlord and manager what I should do and also what I can do.Do I have to let her break her 1 year lease early because she is claiming a "domestic abuse" situation?

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Google Clayton Morris and/or Morris Invest for a cautionary tale of what not to do when buying turnkey real estateUnderstand you can not eliminate all risk, only mitigate it.

The disclosure from the seller says there are no security deposits but one tenant claims she paid one and has proof of it.

The worst that could happen is the tenant refuses to pay, you end up in court, and the judge throws out your claim for some obscure reason or because he doesn't have enough fiber in his life. 

Also you will probably want to claim your rental income as income on your taxes to help you qualify for your next purchase, if you are not doing that.

Depending on how long they've had the property they can submit a claim and pay the deductible which I imagine is a lot less than $20-$25K.