You have to foreclose on the new owner. 

I am planning to add an outdoor sauna for this new property.

The rental market is still extremely hot and prices are high with inventory low, but I have still been managing to cash flow on the new purchases.     

The next night, while at the property to let the tenants know I was the new owner, I noticed he was in the community laundry and with his phone plugged, a bottle of piss on the floor, and looked like he was going to sleep in there.

We were thinking about starting a Real Estate Consulting in a very small scale.We are doing this already for her clients where she finds properties and deals, negotiates with the seller/builder (if new construction), and helps them get a good offer.

If you are getting started and are in New York, I would not recommmend you buy in New YorkStart in a place like Michigan, Tennessee, Missouri or Mississippi.

I would side with your wife on this one, I typically tell people to stay out of AC, Trenton and Camden or any D area especially if you're new those properties are very labor intensive 

In the end now that the deal is off I’ve realized my new deal is much better and it’s likely better that I did not compromise.

A better idea would be to sign a new lease agreement at this time, plus or minus an option to purchase.

I can't tell you how much I appreciate this connection/referral as a new investor.