This is as far in a deal as I've gotten and I'm unsure what is the next proper step. 

If they really want the house, they should still want it in a year or two, and they should be able to save up the 15-20k they need to buy it with a proper normal loan.I realize a ton of people may disagree but let's get real, the biggest problem with the real estate market is people buying what they can't afford.

With the proper equipment (and a handheld glass cutter and a straightedge are not considered "proper equipment"), cutting the glass is a piece of cake.

Books, podcasts, and forums are great, but are not and will never be a proper substitute for practical experience.

@Fantasia BowserYou have been given the proper answer, but on a side note, as it appears you may not be entirely familiar with basic contract law, you may be lacking some critical knowledge in other investing areas too so it would be wise to consider partnering on your first 5 or 6 deals with an active local investor so you can learn how to properly enter and exit a transaction without causing yourself potentially serious ramifications. 

A go-getter with the proper attitude cannot be denied. 

I also know a bit about project management, so if we decide to do a more major remodel on an investment, I can properly plan it out and keep it in check.I just wanted to introduce myself and say hello to everyone.  

None of it is worth very much money, but I want to make sure I follow proper procedures.Does this fall under "tenant" laws?

I'm trying to understand when the proper time might be to throw in the towel and jump into a short sale.We purchased for 450k in 2006 at market peak, lived in the house until 2011, and then rented it out for $1400.00 which is the going rate for the el paso/cruces area hoping the housing and rental market would rebound.

Is it possible to get a good deal and be able to rehab the house and get proper insurance or will i be forced to rebuild anything i get thats on the water???????