I like the idea of 2 bedrooms, but as things stand I would need to cut egress windows into the basement.

No gimmick, no needing to pay a 3rd party to manage this, no trickery involving the notion that there are 4 weeks in a month (there aren't) and some mystical magic about biweekly payments. 

I don't plan on having any further contact with the tenant personally.I may give him an offer through a third party that if his stuff is removed I will let him out of his lease, but I don't really want him back on the property to retrieve his belongings.

hehe, the best part is that the "&" remained

Sorry to kind of ramble but what I'm getting at is, does the cost of this mess get eaten by myself or am i able to go after one of the other 2 parties for neglecting to inform me of an issue.

The hard part is factoring in the time to acquire 100 doors on your own. 

I suggest you Google "APOD", which stands for Annual Property Operating Data. 

I guess I'm asking what would be a win win deal for all parties.

However, it does shift roles of parties under the Option is exercised.

I could be getting 1600/ month and the family only pays 800 and that is cost so when repairs happen its a loss for me:(2. talk to a title company and then can do the papers for you you will avoid some taxes as it is directly to family :) quick simple and easy part is TITLE GOOD LUCK