The townhomes in my community sell for around $170-185k depending on condition. 

In the least- you should get an accounting of the rentals condition at the passing of ownership.

Based on the facts in your post I would lean more towards purchasing a home that is in turn key condition, enjoy the equity, and tax benefits while you educate yourself on other details of real estate. 

Check with a lawyer for specifics on your rights with your state's offer contract to be sure.

Find a good local real estate lawyer and make a call for a free consultation and ask them a few questions to get their professional opinion and find out what is legal, what is in the gray area, and what is illegal.

Make sure they accept the conditions when they do a walk through.

There's little equity in the home and there are minuscule repairs that need to attend to, beyond that the home is in pristine condition.

I am not a lawyer, but I find it hard to believe that the landlord can keep your first month's rent and security deposit if he does not provide you with a place in a reasonable amount of time. 

I am not a lawyer...repeat I am not a lawyer, but depending on the circumstances and your relationship to your partner(s) you may be able to simply collect funds without forming a syndication.

Aside from her attorneys fees of course, she's looking to know Everything else she should be prepared to pay to take ownership of the house.The lawyer has submitted the order and the foreclosure sale is happening first Tues in July.