One of the residents has asked my assistance in getting them help, either from the state or through the legal system.

A lender runs the numbers and realize the investment is solid and they will provide 70% of the purchase price.Now you run inspections, appraisals, legal fees, environmental reports....etc...etc and incur 100k in costs in due diligence.You still need to tie up an equity partner/investor for the remaining 30%.Would you be asking the investors for 300k (the 30% on the $1M purchase) or would you want to ask the investors to cover the 30% + the "load" 100k?

Make sure you consult experienced people like real estate attorneys and CPA's who can research 1031 exchanges and updates that affect them.These transactions are not easy and as you are transferring your old basis of the relinquished property to the replacement property much is riding on your decisions and legal paperwork from the beginning.

I considered legal action but my attorney indicated that it wasn't worth the fight.

Also check in the LEGAL or Homes For Sale section of your local newspaper.

Separation has no legal consequences where divorce does.Is bankruptcy an option?

I believe that one of the reasons we're in this mess is because the Fed forced rates to stay low for so long after they were due to increase, which led to the buying spree, inflated prices, and further blowing the bubble.

and if you have an option to buy you have the legal right to enter into any contract with an end buyer or renter...it is no different than a sandwhich lease option...in a sandwhich lease option you have no obligation to pay the mortgage...the homeowner is on the hook no matter what.

Legal and tax wise??

Find out for sure as it will cost you $500-$700 (probably) to set up and comply with the 1031 legal requirements.