Most re investors are very self-motivated it seems to me and aren't the type who want to stack up a bunch of cash so that they can sit and do nothing.

I have purchased property for investment before and feel fairly knowledgeable about the ins and outs.

Sounds like a good deal to me - get a bunch of appliances and not have to worry about getting them into the house.

Can someone suggest what would be fair to both parties?

I believe it was in Robt Allen's "Nothing Down" that when you see a potential deal you should not; go and ask a bunch of people's advice, get a haircut, THINK about it, pray about it or anything else, just go DO IT.

If you are a sole proprietor then it is fairly simple to treat it as normal income.

I'm a loan consultant, fairly new and in sponge mode.

Dicey like ginsu knifes at the California State Fair.

I have also spent a bunch of money sending out letters and getting the legal papers sent to my home so I may be the first to get the letters to these homeowners.

ALWAYS, ALWAYS, ALWAYS deal with a deliquent tenant ONLY when you have a court date...delaying filing the proper pay or quit and eviction court paperwork ONLY benefits the tenant.If you want to stay a landlord, get a good L-T attorney - NOT a real estate attorney - and follow what the attorney does and go to each and every court date so that you learn what to do and how to do it....most states are fairly easy and the court paperwork is available online...just learn the ropes so you are not so fearful and don't loose months of rent to a "professional" tenant in the future.