I have tried cash for keys before as well with other folks and I still had to go through the whole process to get possession of property.

There is slight chance you can pay off the lien and take possession of the property if there are no other liens and there is a clear title.

With state-owned property, no investor has ever taken possession of the property.

Does the lease bind the renters to the property with the owner being SOL or does the homeowner have the authority to take back possession of his home thus making the renters SOL? 

Well, first step is getting a pay off, which they are legally required to give you, as a successor in possession. even though they don’t make it easy.  

Basically the tenant stopped paying rent and utilities, had the water and electric shut off then abandoned the place with possessions left behind.  

Everything will be re-keyed at closing and possession! 

When you evict, you will evict for nonpayment and get an order of possession as well as a judgment for back rent, late fees, etc.

Notice to quit(1) A tenancy may be terminated by notice in writing, served not less than the respective period fixed before the end of the applicable tenancy, as follows: (a) A tenancy for one year or longer, ninety-one days;(b) A tenancy of six months or longer but less than a year, twenty-eight days;(c) A tenancy of one month or longer but less than six months, twenty-one days;(d) A tenancy of one week or longer but less than one month, or a tenancy at will, three days;(e) A tenancy for less than one week, one day.(2) Such notice shall describe the property and the particular time when the tenancy will terminate and shall be signed by the landlord or tenant, the party giving such notice or his agent or attorney.(3) Any person in possession of real property with the assent of the owner is presumed to be a tenant at will until the contrary is shown.(4) No notice to quit shall be necessary from or to a tenant whose term is, by agreement, to end at a time certain.(5) Except as otherwise provided in section 38-33-112, C.R.S., the provisions of subsections (1) and (4) of this section shall not apply to the termination of a residential tenancy during the ninety-day period provided for in said section.Based on this, it looks like for month to month occupants, 21 day notice is the appropriate time for Colorado, but I wasn't sure if there was any specific code that needed to be followed in Arvada aside from the Colorado text above.  

Particularly you need the Builder's Risk Insurance in case there is an incident during the construction process.You can ask your contractor what insurance they carry and require of you the owner to possess, and also ask a local insurance broker what they see others doing in purchasing a home in cash.