Plus if you bought with all cash from the proceeds of the sale you would be trading down in asset value quite a bit.Depending on the refi rate you could consider keeping this and refinancing it to pull some cash out which you could use as a down payment on another property.Just some thoughts, hope they help the issue with the refi is those rates at the new loan if i do a 75% LTV will almost overcome the cash flow its producing now and basically get to a break even point.

I am unsure if I should proceed. 

Sold our vacation rental and have put the proceeds into two DST offerings. 

Its entirely possible that if he sells the house , and keeps the proceeds , she could be hit with a 1099 and since her debt was forgiven , and be liable for income taxes on that amount   But you wrote "If the man wanted to he could sell the house and keep the profit", nothing about your advice is based on having reviewed the divorce. 

I would then proceed with the STR and let the HOA initiate a law suit. 

If you have pre-tax and post tax Roth funds in the existing 401k, you will initiate a rollover into a newly formed Solo 401(k), with some funds dropping into the pre-tax bucket and Roth funds dropping into Roth bucket. 3) 3 benefits that I find many real estate investors are attracted to with the Solo 401(k): 1) Higher Contribution Limits (providing you have enough earned income) 2) Ability to contribute to Roth, without MAGI limits where you have to do a backdoor contribution, like you do a Roth IRA. 3) Exemption from UBIT/UDFI on debt financed real estate deals, this could be directly, or through a syndication type deal. 4) Now, we can proceed with, what about the caveats and qualifications to open and maintain a Solo 401(k): 1) You need to have earned income from the business/sole prop. that is sponsoring the Solo 401(k).

If possible, reach out to the five people you spoke with and ask their opinion on why they didn't want to proceed.

I accept advice on how to proceed, whether the best move is to ask for a loan from the bank or look for a lender or wait until I have more money.

The senior tax lien forecloses and the proceeds from the sale would first go to them to pay them off, then would go to you as the junior lien holder etc. 

Since it is the product of a divorce proceeding the IRS will go along with the divorce decree.