What to look for, where to look and any way that I can check the condition of the slab prior to an official inspection.We will check into the condition of the soil (Clay, Sand etc.) and any noticeable wear and tear on the outside but prior to inspection, are there any red flags I could look for myself or any questions to ask?

But $651 would not satisfy the loan and release the lien, as there is a prepayment penalty, and I have a faxed official pay off quote from them that's in the mid 700K's.The attorney who arranged the modification has not returned my calls, so I'm really not sure how the principal grew, but I'm guessing it is indeed a penalty, or related to the terrible terms of the mortgage.So indeed, if there was an overage, it would likely be a small amount of money.I appreciate your suggestion, but that would yield something like 10 - 20K, but I'm still pretty sure there is a way to net 200K - 400K if structured properly. 

Possibly say, hey, I can just do this project from A-Z with the right backing/funding behind me (Not really in the position to buy and invest in the materials, but may have access to the funds) and tackle my first official flip project?

Chances are extremely high that they will make their rent, surprise.I would then make it very clear that I will be letting them out of their lease and they must provide me official notice immediately that they will be moving the end of April.

I'll register and everything when the property is "officially mine" and the other more important details are filed and put away.     

My question is, how long from when they first receive that letter would I have to send the homeowner a letter offering to buy it, before the bank officially owns it and it is in official foreclosure.

Time to become an REI officially!

Both of you should sign this at your lawyers office to make it official. 

Should they set up a lease and make them official tenants?

Let them know you will have to do the official inspection after they vacate but this is a great opportunity for you to identify problem areas they may be charged for.Finally, the move-out date will pass and you have to determine if they are out or not.