The lawsuit includes claims for breach of contract, specific performance, and trespass to try title, and the case is registered in public records.Additionally, the lender has initiated foreclosure proceedings on the property due to Seller Z's default on payments.Is there any action I should take as Buyer A?

I would be very careful if you move forward and do it because anything that goes wrong is going to fall back on you and if you do not have a management agreement in place you could be opening yourself up to lawsuit if you fail to deliver on the expected services.   

No denial just hope that right wins out and a good law suit.

It can also file lawsuits, be sued separately from the parent LLC, enter into contracts, hold title and secure interest in assets.

I also use property managers for my properties.Additionally, unless you are an expert on Fair Housing laws you can easily find yourself in violation even when you think you are acting reasonably and find yourself in a lawsuit or under investigation.Finding reliable contractors is an issue and a good property manager should have those relationships saving you time and hopefully money.Navigating non-payment of rent or an eviction can be time consuming and expensive and a good property manager should help you avoid needing to do that with good tenant screening or have the legal resources to deal with it if you have to.You do have to manage the property manager and watch expenses especially for large repairs.

The seller would be stuck with an illegal living situation, possibly dealing with the city to avoid lawsuits, and they have to put the property back into its original condition on their own dime.

If you wish to pursue damages/rent that exceed any security deposit make certain you get their new address so that they may be served notice of this lawsuit (this is often the sticking point in many eviction situations). 

Move out, file a lawsuit...what’s the point of the test is what I’m trying to figure out?

Plan is to start with a multifamily house, or a single family with an in-law suite in the back.

law suits  thats a none starter.. tax benes ?