I will definitely take you up on the offer of picking your brain a bit :)  As I begin to dive deeper I am sure that more questions will arise.

I beg to differ, I believe this is the result in the Association of Realtors lobbying efforts to keep investors out of the pockets of those who carry licenses...From my understanding this has been a fight in the making for sometime now, and now that there has been such a rise in foreclosures, the Association of Realtors has some major firing power now.

I'll see if the Clark County Rental Association attorney can answer that question for us, as I am a member and may have such a situation arise for us sometime.  

I really believe that a rising tide raises all ships and I want to help raise the water.I look forward to being a part of this community.Mike Cowper

How can we insure or otherwise protect ourselves from litigious actions that may arise in the future?

Dan, the confusion arises because you present this as both mortgagees having a simultaneous sale.

That coupled with the fact that Philadelphia has seen a rise in population over the past 5 years, with the large majority of residents falling in the millennial generation. 

Problems usually arise if you try to wear both hats as one time.

Add another $100K for rehab (maybe more if unforeseen issues arise) and you're already above the price of the best comparable in the area.

I am not an attorney and Texas law may be contrary to what follows, but my gut is telling me that since the tenant's name and address is shown on the check, the strong implication is that it is solely being paid on behalf of and for the benefit of the tenant.Subject to TX law, I'm guessing that if you want to be reasonably certain that no problem or claim arises down the road, I'd credit the tenant with on-time payment (subject to the check clearing) but hold the check and send a letter to the remitter thanking them for the check and telling them you can accept it if they sign the attached document.