do you need the  sales proceeds to buy ? 

Minus my fee total of $3620 which is paid from the proceeds (no money out of your own pocket) your net profit is $21,380!

Compare the projected returns of keeping your equity in this property with investing the proceeds elsewhere and you have your answer. 

@Bradley Hendrix, You can allocate the proceeds any way you want, as long as you purchase at least as much as you sell for, and use all of the proceeds in the 1031 exchange.You could sell the apartment and purchase Two SFHs with a 1031 exchange. purchase one for cash and the second with debt.

And we will not proceed as just a design build firm.

If the numbers check out then great, I would keep the deal and proceed with caution knowing you will probably have to kick out the month 2 month tenant 

Title company started title search and while waiting for results (we knew there were multiple liens that would be paid from proceeds at closing), I paid off property taxes so foreclosure was stopped after seller signed the warranty deed over to me in front of a notary.

Are they also responsible for paying your mortgage from rent proceeds?

You probably need a lawyer and to investigate the current state of the bankruptcy proceedings.

I haven't had someone misunderstand me because I always say "100% financing of the loan and rehab costs, requiring you to bring much less to the closing table" and then proceed to explain lender fees, insurance, and title fees that are due at closing. :)