As I was putting together a sight unseen offer, estimating expenses/vacancies %, I was informed they accepted another offer.

Since, I am paying the taxes and insurance upfront for year 1, which is collected from the borrower, when will the end investor have to collect to ensure these expenses are paid in year 2 and beyond?

Are you going to cover all of the seller's expenses....taxes, title, escrow?

A good realtor knows what is working in their markets and what is not so you should have one on your team as a trusted advisor.Buy and holds are a whole different dynamic, every investor has their own tolerance for what they want in buy and holds... some like cheaper property that have good cash flow today and do not appreciate that much over time and others are willing to accept less cash flow today from more expensive property but theses homes appreciate more over time.

If you focus on less expensive properties with lower rents (ie Independence) you will have great returns but more headaches with the tenants and turnover.

Most properties are more expenses than  central and even the northern Dayton suburbs.

So the money you paid is gone and you have a very expensive lesson.When someone buys something at such a great discount, then its easy for the court to say, wow, something so wrong and this is not an innocent buyer, then they do not feel bad about reversing the fraudulent sell.Someone not opening probate when someone dies is why there are homes that someone 'inherited' from a few generations back, but its still owned on record by grandma who died 50 years ago. 

You borrow the $20k downpayment plus $5k in closing costs and $5k in rehab costs from your HELOC also at 6% (note $5k in rehab costs in nothing so the house better be newer and in great shape).Let's say you rent the property out for $1000/month and using the 50% rule you have $500 in expenses each month.Your mortgage payment will be $480/month.

I'm now wondering if its worth my time and expense to even file the claim if they do in fact file for bankruptcy.  

As CEO you don't want to worry about the $15 expenses, but you need to understand when and how you are to be contacted for big items.