If only you have been reporting the property then it's a little murkier and you'll want to verify with your accountant the direction they would want to go.  

How to create wealth and passive income through smart buy & hold real estate investing" It's a NO NONSENSE book that is direct and to the point about this business.

How should I approach the owner directly before the property forecloses?

You can transfer it to a SDIRA or self directed IRA.

Inadequate access to direct sunlight for solar energy systems constitutes a practical difficulty in the third bullet point above.www.stpaul.gov/departments/safety-inspections/zoni...

Feel free to reach out to me directly

I am fairly new to wholesaling real estate. What is the best list to get the highest quality leads from?

Even if they are tapped out personally, as you say it's their busy season, they can probably point you in the right direction.

While the house might be a "Waldo" if prices correctly and listed with a competent broker it should sell for more than a direct sale to an investor.If you are looking out for your grandmother encourage her to sell with a great listing agent in the area.

Not directly in the city.