If you have a clean bill of health aka a title policy that says the taxes were paid, you can file a claim with the title company. 

Congratulations on getting yourself to the point where you know you want to invest in Real Estate - and also with a good amount of cash on hand for someone only 20 years old.Depending on your credit and job history, you could qualify for other type of loan programs, too. The

Due to the our health care system unpaId medical bIlls are not unusual.Perhaps the property could be marketed more aggressively to attract more renters?

From there, do an assessment of your financial health. 

I am currently a Peace Corps Volunteer serving in Paraguay, South America, working on Agricultural/Environmental/Health projects in my assigned rural community. 

I don't think there is much you can hold the old owner too. the proper way to handle this would have been to request the house be delivered vacant and then refuse to close until its vacant. you accepted the house under the condition it was, which was one room rented out. you now have a tenant that is refusing to pay rent. you will have to lawyer up and evict.

Obviously you are not adding a bath or kitchen so it will more than likely be ok but I know here in my area the health department goes by the number of bedrooms. 

So, there is no point in giving away happiness and health for something so . .   

Where my long term concern arises is they are all 3 older and have various health problems they deal with..... so riddle me this. 

Justin, You can rollover your 401k into self-directed IRA, but not into HSA, which is Health Savings Account and not a retirement plan.There are several reputable providers here on BiggerPockets who are active on the forum, just search the forum for related keywords and you will find out who they are.