We stipulated in Lease that Monies were NON-REFUNDABLE after Tenant took possession, except for "Acts Of God" (Hurricane, Tornadoes, Floods, etc) that might make the property uninhabitable.  

This is definitely discussed at the beginning, prior to them taking possession of the property.Happy InvestingDerek Dombeck

What you did (estate sale, grill, artwork, etc) sounds exactly like what I do with my 22 STRs. 

Account ClosedNice to see you participating in the forums ... and the small step forward of dropping one of your frequent {stuffed} keywords from your post.The handling of a squatter vs a tenant will undoubtedly differ with jurisdictions, so the ultimate advice is to consult your legal counsel on the matter.The crucial distinction - at least here - that that a squatter had no legal right to be at the premises and is essentially in trespass / illegal possession of the property.  

Tell him you are entitled to possession because of the tax sale.

As both first in line and (usually) last in line, they are in a unique position to gain possession of this property.  

Bear in mind that a 203k property becomes eligible for the program because it would be otherwise uninsurable on a regular mortgage-- houses end up in HUD's possession for a reason, and they're often ugly ducklings. 

Then you find a buyer who is willing to pay $130,000 for this property so without taking possession you assign a contact to a new buyer and make $30,000 profit.

If, after the Leaseexpires, Tenant remains in possession of the Premises and continues to pay Rent without a writtenagreement as to possession (and Landlord accepts such Rent), then the tenancy will be regarded as amonth-to-month tenancy, at a monthly rental of $3250.00, payable in advance, and subject to all theterms and conditions of the Lease.We have given more than sufficient notice and we will not accept the rent payment.

Once the bank takes possession of them after sheriff sale, they may prefer to use the auction as a stalking horse for where to list the property on the MLS.