Account ClosedWater lien has no legal right to the property, if you pay for it as a 3rd party.

Everything from funding permits, zoning to dealing with construction companies could be an issue. 

Are you going to be able to get a building permit without doing a proper conversion?

If they are not licensed real estate agents, is there a way to legally incentivize them?

I have set it up where I will be responsible for the title policy as it is my understanding that this creates the need for only one title policy in a double close and not two (of course need to confirm with title co) during a process like this.My questions are this: -What to watch out for when doing this, are there are any legal issues with marketing a short sale like this?

Last thing you want from a moral & legal perspective is to put a new family in there, house gets shot up then it comes out you knew about it & didn't disclose.

Whether you're legally liable or not, I think you'd still run the risk of being sued and having to spend money to defend yourself.  

There was a guy that did a post the other day who was 21 and already saved $100k.A lot of the times (this is not legal or insurance advice), but your assets can be adequately protected via proper insurance on the property which would included a liability policy, and then with an additional umbrella policy.Keep in mind, transferring a property from your personal name to an LLC could trigger the loan's due on sales close.

These records provide you a lot of info, and do not require the management company to give you opinions about the tenant that for legal reasons they would not want to give you.One last thing, they are a private company that, as far as I know, has no legal obligation to provide you with any info at all. 

Biggest concern would be zoning and permitted uses.