In that example,  The 2nd mortgage holder would need to be paid. 

A lot of foreclosure work is done fast and furious and it's not unheard of that a lien holder was not properly served in the foreclosure process and can later assert a claim.

A holder of a note with mortgage/DOT is a lender and controls the property through the security instrument with the borrower carrying the burden of ownership liabilities. 

Either way, everything is negotiable but as far as what's common it sounds like they would just be a private lender, or hard money lender, or even conventional financing.. in each case these lenders could all just be 1st position lien holders  meaning they are strictly financing the purchase of the property (generally with you providing a down payment and closing costs) and not the rehab.

., AM Best rating, internet reviews from actual policy holders, etc.).

I also can't argue that in the short run, I too have made ten or even a hundred times more than I would have as a buy and holder with a few caveats.

This is because of the masking a company does for its share holders.

I can foreclose and wipe out this lien, however I would much prefer the DIL path for both total out of pocket cost and time.I would like to respectfully request some help from the massive pool of experience on BP with some strategy advice, advice/tips on locating the lien holder, etc.The summary above greatly simplifies the situation, so please ask any questions of me that need to be answered and I will promptly get the info posted.Thank you!

The current mortgage holder would execute a lease options/rent to own contact with a tenant.

I tried negotiating the lien with the holder and they didn’t think I would foreclose...