If you take a copy of the liens to the Labor office downtown they will accept cashiers checks and give you paperwork showing it is satisfied while you wait.

The need to know the rules, guidelines, paperwork, processes, etc.

As long as the mtg foreclosing was recorded Prior to the IRS lien being recorded (most likely since the lender wouldn’t made the loan) it is essentially a non issue….the mtg is superior and the lien goes away upon the foreclosure but the irs has 130 days to redeem (pay you back), but they never do. 

Should I be concerned or should I start the paper work?

You and I have not seen her paperwork, her credit report, her loan application, her verification of employment, or anything else.

Essentially, I do my own taxes and book keeping with CPA oversight. 

I would do essential repairs and try to get it rented.

All units currently occupied, on month to month that haven't had paperwork since about 2017, and 1st/2nd units under market rent. 

What are the advantages of having one (arguably there are no costs that can't also be obtained with an umbrella liability insurance policy) versus the costs (yearly registrations, extra paperwork, startup costs, more expensive mortgage options)? 

Once they would sign the agricultural easement paperwork allowing us to build, it would restrict them in the future from splitting their 40 acres in any way.