I currently have a rental with 2 adults (husband and wife) on the lease. She called me today and stated that they are getting a divorce and that she wants to stay. I inherited them, but she says she makes enough mon...

Even if you are keeping commercial sometimes retrofitting an existing building can be more costly with money and time than just tearing down and building new.

And generally, those are the same folk who already know how to create more wealth out of their existing wealth.But when starting out, (having "small pockets"), a positive cash flow model fits the bill for the main BP audience.Nonetheless, a search around BP will find very many posts recommending buying for appreciation/negative-cashflow rather than no-appreciation/positive-cashflow.

Hardwood is great for rentals because of the durability so I'd sand/re-condition the existing floor (if it's in decent shape).

I believe Escrow is once you go firm / commit to the property after due diligence (DD).

Put it down on a portfolio investment or use it to pay off existing mortgages? 

Congratulations, you've found one of the best online communities and REI resources in existence! 

When you sign a contract, HONOR your commitment. 

Your are buying/financing an existing business (even if you live in it), so it already has income/expenses that will be considered.

Assuming you have a trustworthy guy, maybe you don't save a ton of money with a fixed cost route, but at least you know exactly what you're committing to - barring some catastrophic find with the plumbing - when you start the job.