Due to the describe issues with the contract, I wrote the contractor outlining the fact that the remaining work to be completed exceeded the balance owed, and that we would rather end the contract now and move forward with another contractor.He had tentatively agreed to this, but when he discovered that his tools were missing he threatened to place a lien on the property for $3900 this week.

As mentioned before, if you go a little farther, outside of city limits and outside of an HOA/POA then you should be fine as less regulations will apply but you would have to read the verbiage in the deeds which will outline the restrictions set for every piece of property.

lolBased on the items you've outlined in your repair list, methinks $24k is too high, but if that makes you feel better, so be it.

And/or get something from the 1st mortgage outlining that they are obligated to pay the partial claim in full.Who is the 2nd mortgage with?

Here are a couple of articles that outline the cons/pros of 721 UpREITs.https://perchwealth.sharefile.com/d-s556dbdb44b3b436c93a0ce1... 

Depending on the preference of the seller, I am actually presenting my potential buyer's information to them and getting their approval before we close with title company.That is a basic outline of the process I am using.

the lienholder must still go through a foreclosure process in the Massachusetts land court, the complexities of which are more than I would outline in this post. 

The process is outlined below.

You will need to do a 1031 exchange; or one of the options that @Nathan Meeker outlined. 

Go in and get the keys and any info you may need (copy of leases, tenant contact info, etc.) and make sure the next person to manage the property has everything they need to do the job effectively from the start.If you signed a contract with the PM, then you'll need to examine your obligations outlined in that agreement and any "out" clauses you may need to reference when telling the PM you're changing directions.