Additional concerns include area study, property inspection, knowing local market circumstances, and legal adherence to Philadelphia's landlord-tenant rules.

Hey Jacob,Hiring a real estate attorney can be a smart move, especially for navigating the legal complexities involved in purchasing foreclosed properties.

@Daniel BryanI agree with JacobBetter returns elsewhere and downside is if your borrower defaults depending on the state it could take years to foreclose and run all that legal and holding costs which wipe out any gains.

Would renting this space to a single mother and her toddler pose any safety / space issues legally?

My question is how should I proceed and who am I legally obligated to, the old tenant or the new tenant?

Can I legally charge them (i.e. hold up in court if they dispute)?

You obviously want a lawyer to guide you and to handle the legal work on something like this. 

It is just a legal filing.   

The way the condo is set up, I would need to allocate the one window in the living room to the new bedroom, meaning the living room will no longer have a window.I know bedrooms require certain legal restrictions to be met (2 egress, certain size, etc).

Biggest risk is the complaints from neighbors about the noise, although I've heard that there are new paddles that dampen the noise quite a bit?