Option 2 will cost you attorneys fees, filing fees, service of process fees, etc.... some of these can be collected on the back end if you get a judgment, but the attorneys fees typically aren't collectible. 

If I replace it now while living in the house, can I begin depreciating the remaining life of the roof when I put it back into service as a rental again?

Market CAP Rate: 7% | Mkt Rents: $1100-$1200 | Duplex: 2 2BR/1BA Units Pro Forma Numbers GOI: $28,800 Effective GOI: $25,920Total Expenses: $10,400NOI: $15,520Debt Service: $12,427  Based on$165,000 Purchase price. @ 20% Down 5% Interest 30yr Amortization Cash Flow: $3,176 CAP Rate: 9.46% 

I think it also locked him into using the PM for add on lines of business like using their repair services or something similar.This shows that you value the owner's business, but you want them to show loyalty in exchange for holding them in place. 

But I've never had anyone beat his price or service!

I already know that a clean nice lit storage area would be a great upgrade, and we plan on doing that to the basement, after we paint over the graffiti/etc  https://www.realtor.com/realestateandhomes-detail/...I appreciate it! 

Are there better services you have seen or are using?

It's kinda like a service fee... :)  Don't get me wrong, I own nice rentals in nice areas. 

He wants to rent with a lady (she has 15 yr daughter) with 700+ credit score, 2x salary vs rent job, BUT she has "judgement from court" for child support services ( She needs to pay  for child support).

I would recommend talking with Barron Property Services, Dorfman Property Management and IPM real estate.