Don't know the laws in your state and how a city foreclosure would affect outstanding condo leads.

It's a few streets away from an extremely affluent Miami area but without the hefty price tag.The property presents as an outstanding investment opportunity if I can resolve the violation issues.

You may need to pull title first ( at least an E&O report), because if you do decide to pursue a DIL, you will inherit any liens that are against the property, and per Dion it's not a bad idea to check with licenses and inspections dept of the city to see anything outstanding including demolition situations like he mentioned.

The score came back low, and the applicant has 7 collections outstanding dating back several years to current. 

Check out the local comps, look at the back taxes owed online, try and find the current owner, if you can get access grab your contractor and get an approximate rehab cost, check with the City to see if there's any outstanding violations.

Apparently we're good to go since there are no outstanding permits and we'll be getting one to get things up to code.

Additionally, evaluate the outstanding maintenance on the property such as roofing, flooring, interior/exterior paint, appliances etc and see what their life expectancy is.  

Now, its very likely the buyer of the loan paid less than the outstanding balance. 

While the statute is silent on the subject, a defaulting purchaser facing a statutory cancellation by a noncompliant multiple seller might seek to apply these damages as an offset against outstanding delinquencies.

I have projected the numbers using both methods and when accounting for appreciation of the assets, the leveraged approach wins... as long as your personal risk tolerance allows you to have large amounts of outstanding debt.