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Matt:One quick recommendation: when I started I got frustrated with all of the clicking through the Internet to research property.

This will vary depending on the value of the time lost, local laws which may favor tenants and hobble landlords and the occupants obsessive nature, access to information (damn internet) and determination.I've been involved in plenty of cases where the landlord lost perspective and it becomes a battle of wills, personality and tenacity...not money.

Is there anyone out there who may have some advice as to how we can locate individuals rather than the typical internet search?  

If they paid you fake rent and sent you a statement saying tenant paid rent, I would also file in small claims court and blast them on every internet site you have ever heard of. 

DISCLAIMER: Not a lawyer, just some dolt on the internet rambling on about something or another.

@Kevin Sanderson There are templates all over the internet.

Hopefully, you'll go to an attorney for your partnership agreement, the lender needs to see this and one off the internet that misses buy outs, conversions of interests and key areas for financing risks won't look good as to your ability to manage or as to your grasp of business, see an attorney!

Has it EVER been this bad or is it due to the rise of the internet, youtube, and the general economy? 

You stumbled upon one of the best real estate investing sites on the internet!