Sounds like you're willing to catch up the first and pay off the 2nd to take over payment of the property so offer the 2nd start @ 5% of their outstanding balance to release the lien and not go after your seller for the deficiency then go up from there.

Outstanding work order requests.  

But the loan amount outstanding when you sell has no effect at all on how much tax you owe. 

The property in question has two loans outstanding. 

It generates a profit each month (rent is 4500/mo, expenses including mortgage are around 3500-4000.Currently the property is worth about double the outstanding mortgage balance. 

@Robert McDonnell it's outstanding that a young man your age is pursuing Real Estate.

However, an interesting point around credit scores came up as credit scores generally decrease when you take out a mortgage because it increases your total debt outstanding.

It might be more than your auction price, it might be higher.As Wayne mentioned, there are extra fees included, not just the outstanding principal.Hope this helps!

It is commonly done for various reasons including that the tenant is outstanding or the LL is too lazy to determine fair market value or risk a tenant turn over. 

Definitely keep the deposit and apply it to the outstanding rent and late fees.