The house probably also has delinquent taxes etc on it as well.

I know this is pretty obvious, but have you tried checking the Montgomery County property tax records or the property tax assessment records online for Silver Spring?

Also, during those 2-3 years you may have to bear to obtain possession, the borrower will probably ignore court orders to pay insurance and property taxes, leaving you out of pocket for those costs.  

Could use some guidance on how to divide the business, taxes, and payouts.

Typically, $100,000 is sufficient and will cover 99% of all claims.

Hi Mandeep,The 100 sq. ft. of exclusive landlord space could be utilized in a Business Use of Home deduction on your personal tax return, accounting for 10% of your home expenses.

So I'm wondering if I maybe messed up when it comes to accounting and taxes while rehabbing a house to rent.

Look up local ordinances, laws, taxes, and insurance.

That will provide you with confidence knowing there are no taxes owned or unpaid liens.I have worked with Lucia Rushton in DFW multiple times who can great agent and it is well worth using her to avoid painful mistakes! 

A 50 unit building has one property tax bill and one insurance bill.