How do you know they are the legal owner?

I don't think we can give you the definitive answer here.

I don't think it's wise to get involved in their legal troubles, and if they found out their landlord reported them.. think of all the damage they could be.. yikes!   

Several of my recent buyers have been medical and legal professionals with high taxable income, that are looking to expand their value portfolios by incorporating an accessible short term rental property (often doubled as a legacy anchor) that will often offset or 'pay for itself,' in tax savings. 

Given the circumstances you've described, it seems you have a strong case for taking legal action against the seller.

Your property definitely has the potential to benefit from a cost segregation study.

I am an investor and realtor in MN and would definitely take advantage of it given the opportunity. 

As a first time investor in a brand new state and city, we aren’t totally aware of certain laws but definitely want to do what makes the most financial sense as well as ethically sound decision.  

Definitely make sure to have a lease termination fee already spelled out under your next lease.

You didn't mention if those funds are from a residential real estate rental or commercial.  3) Shameless plug for Tampa: you will definitely find higher cap rates in cheaper places.