Selling that property if not appreciating or cash flowing is likely smart to avoid sunk cost fallacy and take time to be thoughtful before deciding if you want to do it again. 

What is the best way to avoid legal issues when making decisions for this property and to not let him claim anything when selling the property?

That said I still managed to get 3 off market deals one through a small bank I did business with that was trying to avoid foreclosing, a stagnant estate property with short term owner financing and a pocket listing.

About 50% of the deals they find are off-market, which is a huge advantage for international buyers trying to avoid bidding wars.Since you are looking for long-term hold, are you leaning more toward Section 8/subsidized housing or standard market-rate tenants?

So you’re not doing anything wrong.Given your call volume (≈1/month), I’d avoid anything heavyweight or “full platform” based.

I'm not mad there are twists, but they seem VERY avoidable.

It’s been a helpful way to stay conservative on paper while avoiding surprises in real life.

Tying up $700k to avoid today’s rate only makes sense if that capital isn’t earning a better return elsewhere and you’re confident rates will drop enough to justify the round-trip costs.

From a liability standpoint, it usually makes more sense to reorganize and isolate the commercial building into its own LLC, with its own insurance rather than dissolving everything or changing ownership just to avoid a partnership return. 

Side note, here is a podcast episode I recently did with BP: Avoid Paying Taxes (Legally) with THIS Rental Tax Loophole Hi Sean, I have emailed you.