Does anyone have advice on how best to proceed, and what professional advice is necessary before signing?

If this was my only strategy I would've starved years ago.Pre-foreclosures I don't deal with all that much anymore (a lot of it because of the laws in WA) but have all my FSBOs sign a Form 22 FSBO stating they aren't distressed as a CYA.  

I have been listening to the podcast, watching webinars and reading articles for a few months now and finally decided to sign in to the BP app.

It is not a good sign and there is a fair chance tenant will continue to fall further behind, especially when it gets to holiday time.

Sounds like they probably accepted the other offer as they’d likely forward the signed acceptance to the buyer.

I know that it is legal, but is there a problem with me telling the tenants right off the bat that they need to sign a lease agreement?

Is there a stop sign or red light there currently?

As far as LVF selection goes, from my research a thinner (3.2 - 4 mm) LVF plank that will hopefully be more flexible to handle the not perfectly level hardwood floor underneath. 

You can select the amount of the deductible, usually ranges from $500 to $5,000.

If the 2nd feels the seller has enough assets, then they either want a personal note signed or a pay down prior to closing so on the HUD they only net the $5000.