Is this possible to do at zero down by simply adding PMI?

I can tell you that the assessment value and the appraised value are often far apart ... but I wonder if it is simply a typo.

The foreclosure may be simply stopped for now.

Or, more realistically, are you looking for that rent to simply offset a portion of your "rent"?  

To give a general idea of some of the mess they left - left it with 2/3rd of the lightbulbs burnt out, holes in 4 doors, very poorly patched holes in the walls in more than 5 locations, missing showerhead, missing ceiling lights, excessive mold, large hole knocked into paneling, enough garbage to overflow a roofing trash trailer, 2 tvs (1 stood 4' tall), cobwebs and filthy walls, excessively filthy carpet including over 15 dog male (squiggly!)

I think many tenants try to see what they can get away with or they simply don't have the money and probably don't pay many of their other bills either

I had never heard that before.. and this has nothing to do with swapping contracts but actually advertising and selling homes whether you own them or take the quasi equitable ownership argument.I would simply contact your State Department of Real estate and get clarification.. this could very easily be why you see no bandit signs etc.

Simply because they have more to lose.

Simply wanting to confirm when implementing this process, we will incur the expenses related to cost of closing 2 times ( once for the cash purchase and a second time for the cash out refinance) correct? 

I've no interest in commercial real estate and consider the learning curve steep enough at this point simply focusing on residential.