Since we live out of state, we couldn’t decide what’s the best strategy for us to proceed forward.

I would let her know that eviction proceedings are being filed and ask if she wants to voluntarily leave right away versus going through that process. 

So after the landlord is made whole any excess proceeds should be returnedMy guess is the landlord would lose in JP court in a non-refundable scenario.  

First thought would be to do the BRRRR strategy or build a Fix and Flip business and invest the proceeds in building a SFR portfolio.You can definitely go ahead and purchase an apartment complex of $2MM, use third party property management and be somewhat active doing the asset management and making sure the business plan is accomplished.And then if you want to go totally passive and get "mail money" you have REITS, Syndications, and some other strategies that will each be a good option for you or not, depending on your return expectations, risk tolerance, etc.I used to own 4 SFRs and made the transition to large commercial multifamily.

You provided a proof of funds from one source, and now you want to change the source of your funds to have them come from the proceeds of another sale.

You should still proceed with the notices and the eviction process as you would if no money were given but why not grab the $500 if it's there?

Good luck, proceed with caution.

If you allowed them to move in, sign lease and gave keys but did not collect the money at move in time, typically you will have to send a Notice to Quit and proceed through the eviction process to remove them.In which case, is definitely the fault of the landlord for not collecting payment upfront when the lease and keys were exchanged.

If they are both over 62:  One thing you might look into is selling their current home and using the proceeds in conjunction with a Reverse Mortgage to purchase a home in Denver.Here is a Kiplinger article on it:http://www.kiplinger.com/article/retirement/T037-C...It is from a couple years ago, but I am guessing that it is still possible.

Great news Usually the best way to proceed is to go right to the source your seller and your escrow agent Great job