From the owner's standpoint getting a letter from you will do one of two things - it will either bring up bad memories and she will throw it away or it will give her a chance to close out the last loose-end from her bankruptcy.  

You must honor any leases in place when you buy a property, but once they are due to expire, you determine the new lease and it's terms (within the bounds of the law, of course).

You can loose a lot of money if you don't know what you are doing.

You might loose 50k but you will learn a whole lot. 

I don't want to loose it to someone's higher bid if any evens bids on it.

Our house had rats' nests, termites, loose wires, holes in sheetrock, no doors on the cabinets, damaged siding and no oven. 

@Bill DenglerWhen dealing with the bank, the term " highest and best " is loosely used and can mean anything.

What do I do now that doesn’t overstep any bounds?

Are you willing to loose that relationship when things blow up? 

Being that old of a house,I would also go after the major inspection items that are bound to come up.