The best way to handle this (imo) is to talk to the guy on the bench next to Mato (first building on the left coming in the first gate from the start) he tells you about Valentino, then talk to Ingreus to get the quest wait in that little strip between Bospers shop (the BEST master to join) and the steps to the upper quarter at 4 am.
Valentino will come strolling by (get familar with the area you want to be in the alley, amap but closer to the open area he comes from, so the guards on the steps don't see you) then at 4am have your Oblivion spell already set to your chosen key, talk to him and then wack him, only using melee.
Then take his gold and key, comes handy when you sneak into his house later.
Then cast Oblivion and if it works he wil say "Oh my head" or somehting like that , just save first.
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Return to the guy on the bench the next day, tell him and he gives you something you can bring to a bartender down by Constantino.
Always do all the masters quest then just say you will think about it and go join Bosper, this way you get all the xp, plus always ask each master for their approval to join another master even Bosper that is an extra 200 xp from each.
You can bring the guy back to life (at the docks) or anyone, there is an inhabit person (ie go into there body) thne hit the F8 button to fully heal them then turn to your body and hit the inhabit key again.