Be prepared to follow up multiple times, using different forms of communication—calls, emails, and if possible, in-person visits to their office.

I can feel that spark of excitement you’ve got.. it reminds me of the thrill I had when I first dove into real estate decades ago.

It could be possible to still negotiate a purchase depending on the stage of foreclosure it is in. 

I cannot imagine that having 1 thermostat for 2 units would be possible especially once we move out and have tenants in both units. 3rd unit dilemma The 3rd unit is not finished.

Actually, it is possible do structure a 1031 Exchange on the sale of one or more relinquished properties and then using the proceeds through the 1031 Exchange to construct improvements on real property you already own.

I assume you know at this point but in general, the goal is the screen for a very good tenant and keep them there as long as possible.

Personally, I've felt the investment has been poorly run in almost every possible way.

The bottom line is that your scenario is possible.

At this point, they are doing most likely what others here didn't think was possible, and probably something they failed at. 

In this case, the seller is still responsible for his original loan, and then Ashish's answer is correct: interest deduction belongs to the seller.Once I re-read the original post by Anirudh, I realized that he left both interpretations possible.