I have 10 properties in total, and these are the two which have the least favorable financing terms and also the lowest principal balances as $39k and $6k.

I have ACH setup for most tenants through Buildium, which works well since it clearly shows the outstanding balance (rent + any late fees).

Do the transaction properly with a title company and a warranty deed.

Another idea I had was to keep a credit card on file and charge it on their move out for any outstanding balances if the security deposit doesn't cover it.

Josh,Whydon't you start by asking the creditor what the outstanding balance is.

I tell tenants that pay partials I work with them as long as the late fee is paid and they are caught up in week 2 to 3.It's better for me than going a few months without rent and reconditioning the place.To be clear I DO NOT tell them it is okay to pay late each month NOR do I let the balance keep growing past what is owed for that current month.

This is a process most commonly between competing brokers on behalf of their agents discussing issues such as what there a coop fee, who showed the home and when, were there any signs of abandonment or estrangement by either parties and a multitude of other factors that only a fair impartial hearing panel would be used to determine if the rules set out by the Nat' Assoc. of Realtors are properly followed.Close the transaction, get your home sold, and thrreated to sue any Realtors for totious interference if any of them threated to hold up the sale unless you pay them a fee over and above what you have already agreed to in writing.

I'm wondering what other people here do and what the proper way to handle this is.

.) $1,000 Monthly Rent; $500 monthly will be applied to principal balance 4.)

The other responses are merely advising him that his costs will be higher than he expects in the future so he should be socking away the proper amount of cash just in case he needs to replace a roof, ac unit etc.