I don't lend in NY (we do investor loans in most of the country and consumer loans only in FL, but we do nothing in NY), so I don't have a dog in the hunt here, but don't discount other types of loans, including a loan designed specifically for flipping.

We agreed on a great price for the area.

Maybe it's time to have a serious chat with your PM about your concerns and see if there's a way to address this situation before it gets any worse.Sean, I agree with you 100%.

She agrees that would be fine. 

Of course, there is an issue of where do you live for that period of time to establish that you 1031'ed into another investment property...I agree with @Michael Plaks, I don't know how you figured that savings...As for "...harder to sell to potential buyers," the 1031 transaction is mostly transparent to them. 

The estoppel agreement will verify what they pay and the terms they agreed to but I don't think it will hold up in case of an eviction.

My plan is to contact them in effort to get them to sell the property based on the assumption that they are out of state or possibly out of country and the property looks like it is in a fixable condition. 

Thanks Nate, I understand what you are saying and agree.

Kaveh - I agree with the others above.

I completely agree with @Nicholas L.