Value (mostly sfr/cnd not apt), debt, equity, loan details, transaction history, parcel maps, etc.

I am not a licensed servicer/debt collector and would almost certainly mess something up if I attempted on my own the first time.  :-)Lastly, what other questions should I be asking or what other input would the BP crowd offer for this situation?

I'm leaning towards killing some debt since I'll still have some money to use on a down payment.

Leave this to the lawyers and have your borrow pay legal fee

I am not practicing as an attorney nor am I licensed in your state so this is business advice not legal advice.

Legally, what should be my next step?

Agreed, the owner likely just Thinks he needs to do this....no mtg, legal or tax savings reason for doing it.

If you have debt, try to pay more than the minimum payment - even a small amount can have an impact.Don't close any credit card accounts - part of your score involves how much credit is available to you.   

This way there is no legal issues involved.

My husband and I are still on our journey paying off student loan debt, so I figured it would be a few years before we got into the real estate game.