I would expect to pay (and have paid) about $4000-5000 for replacing sewer line from the house to the main line. 

If its a freakin pig pen, then you can expect that they'll likely treat your property the same.

What kind of closing costs can I expect as a seller?

He told me that we can't do that and that it is a partnership.In looking at the IRS definitions it states:PartnershipA partnership is the relationship between two or more persons who join to carry on a trade or business, with each person contributing money, property, labor, or skill and each expecting to share in the profits and losses of the business whether or not a formal partnership agreement is made.The term "partnership" includes a limited partnership, syndicate, group, pool, joint venture, or other unincorporated organization, through or by which any business, financial operation, or venture is carried on, that is not, within the meaning of the regulations under section 7701, a corporation, trust, estate, or sole proprietorship.A joint undertaking merely to share expenses is not a partnership.

How much do you expect to go towards expenses of an old home?

Most people don’t know their rights so be nice but firm with what you expect them to do.

I also recommend:- the property management book from Brandon - so that you can learn about managing your future property and what to expect- a book on rental regulation on your state.

Being willing to adjust your expectations of what is a "normal" living situation can propel you much further than you might expect.

There is a lot more inventory than I expected.

I'm hardly an expert, but your description of how to proceed sounds like what I'd typically expect from a seller finance situation.