Since you collected the deposit and took the property off the market, It seems to me there is a valid lease in place. 

You want to be in control if there's future issues and to avoid a costly Unlawful Detainer action - - you can give a 30-quit and be done with it.I favor a full CR and look at the 30,60,90 lates and the collections - - want ZERO within the last 6 months. 

Seller financing usually comes into play because of three situations1- Property is not financable (construction defect, hazard, uninsurable, needs extensive rehab, etc.)                                                  

But I can see that they'd rather just collect payments rather than having to deal with taking over the property.

The ONLY reason to buy there or in similarly bad neighborhoods like Arbor Hill in Albany or Crane St in Shenectady, or South Troy for that matter, is because you can easily get 15+ cap rates and 30+% COCR because most of us would rather not have to wear a helmet when collecting rents.  

A:  Tell the two tenants that are behind in rent that we are not offering them a lease and give them 30 days to move ( do I still try to collect from them next month?)

Are the expenses (potential cleaning, bills, service calls, etc.) simply subtracted from the collected rent?

It's a collection of the best flipping info from the site.

At that point, since I had done extensive market research, I knew we could really do great things with the property.

Your organization should have a "collection policy" that outlines the steps you will take and when you will take them.