You may be able to send a self addressed stamped envelope to the municipality of your choice and ask for after the auction unsold liens listing. 

Secondly my fiance prefers a top unit (the two top units are a 1 bed and 2 bed and the 2 bed makes more money so i want to rent that out)I plan on having all the tenants switch to yearly leases (they dont have a choice on that matter cause my insurance is more expensive if they are month to month).

Those are your cheapest choice, as long as you're under the 10 mortgaged property limit.

Wouldn’t be my first choice. 

Be more selective on property management choices, first property manager kept rent for herself and still owes me money Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

If you have to move and turn into a rental that is your choice. 

About to wrap up "Art of the Deal" by Trump and getting ready to start reading "Investing in REIT's" by Ralph Block.The latter was a choice inspired by advice in Mary Buffett's "Buffettology" about getting specialized and fully understanding the business you're investing in.

If not, see the next two choices strategies.Do you want to keep her as a tenant?

Sounds like the lender doesn't want to go through the pains of the estate issues, well, they have no choice, it should be pretty easy to get an attorney involved in the short sale transaction and just buy it. :)

These would be my secondary choices due to less potential for appreciation and rental growth in my opinion.