Likely the reason it cash flows on paper is due to a very large construction component that you might be underestimating.

Some sales are done online, otheres in person only and some others are both online and inpersonal simutaneously.I've written here on BP many times on Tax Sales. 

The transition isn't just about property size; it's about shifting your entire approach.I've observed that successful transitions typically happen when investors have:- Stabilized 5-7 single-family rentals with systems in place- Built relationships with at least 2-3 reliable lenders- Established a maintenance crew that can handle larger projects- Accumulated at least 6 months of operating expenses as reservesI asked a client of mine who owns a 420-unit multi-family in Nevada how he started his RE investment journey, and he told me that he started with a duplex in Buena Park, CA, 40 years ago and used the 1031 exchange to grow his portfolio to 420 units, never paid taxes on sale of any of his properties.The most seamless path I've seen starts with small multi-family (5-10 units) rather than jumping straight to 50+ units.

It's a townhome that we bought to move into, but due to some last minute changes we decided to live with family and rent it out (our mortgage company is aware of this).

Keep us posted on your progress.

Really make sure to do your due diligence on this front on every property you look at

Quote from @Chris Seveney: We were deep into due diligence on a loan purchase, and everything looked solid.

I’d love any insights on next steps.

Ideally I’d like to leave my realtor out of this sale due to their high price tag in my area.

This is insane that these guys got that large of deposits on a pre sale rental house construction sent directly to them.