It is in a great neighborhood - we live here and part of the reason we are finally getting into real estate is because we love our neighborhood so much, I used to be a college basketball coach and for me to accept a new position meant relocating and we did not want to leave Mt.

You don't want to be rushed into accepting a poor tenant.  

Like I said, I doubt any judge would rule in my favor aganist this guy, and I accept that.

Here's my situation:My offer of $168,500 on a foreclosure was accepted last week. 

I would like to get a good relationships with my tenants, meet them and wouldnt mind accepting section 8.

The house is worth about 58k but I know he would accept lower because he sort of mention they are willing to take less with a large down payment.

I would either try to get an acceptable cash-on-cash return on your downpayment from cash flow, or try to find a property where you barely cash flow but stand a very good chance of appreciation.  

In the past, we have both gone to check out the homes.so i was wondering if it is possible for me to check them out myself and make an offer.Basically what i am asking is, if my offer gets accepted but my partner does not like the deal can i back out of it?

To some degree you can use it any way you would like.

I don't think the bank is obligated to accept any payment from the junior auction winner.