Your tenant, with two good years of regular, on-time payments, has earned a right to be treated more kindly than given an all-or-nothing ultimatum.  

It's treated much like the lead paint disclosure.

Treat it as a huge business networking event.Also I think you should get your real estate license and make that your primary source of income. 

Not trying to treat loans like hot potatoes.  

They all taught me VERY GOOD LESSONS of what NOT to do/how NOT to treat people!!!

There's obviously the potential of moving them into a post rehab unit but will you be able to get the increased rents and as they're tenants prior to you buying will they treat the new unit as well as a new rehab required?

Number 5, treat it like a rehab for flipping.

My personal opinion is that, since you are now targeting a very different audience, these properties ought to be segmented and treated very differently than your run-of-the-mill probates.Granted, there was a time when only the super-rich owned (and died owning) million dollar properties.

I realize that this is how the industry operates and they pay out based on mortality tables etc... but the family feels they were treated unfairly. 

When you treat someone in a war-zone with genuine respect you may be the first person to ever do so.