I would go talk to the parties living in the house to work with them to try to get into the house to look and if purchased leaving the house in good condition. i.e a couple hundred dollarsto leave peacefully or the ability to live in the house while you foreclose, first month rent at another location etc.

The home is in good condition but has negative equity.

"Disclosed Operating expenses:"RUN your own numbers.400 rent X 4 = 1,600 monthly X 12 = 19,20019,200 gross income divided by half.10% vacancy30% operating and expense10% managementYou have then 9,600 a year.At a 10 CAP you have 96,000 purchase price.1 beds have a lot more turnover than 2 beds do.The people get a boyfriend or girlfriend,get pregnant,family member or mom moves in and they now need a 2 bed.Pay attention to if 400 is at market or below market rent.If it's below market you can keep tenants staying for a long time.If it's high for the area or at market people will move as soon as their income starts falling to a cheaper alternative which creates more turnover.For each turnover you will have lost rent and re-condition costs.The 96,000 purchase price does not include immediate fixes.Example the roof needs redone,mechanicals only have 1 or 2 years left before having to replace etc.

By the way, if there is no lease agreement, I'd get them set up on a month to month ASAP for other reasons.You obviously approved of the property condition (you bought it), so it does not appear that the dog is causing property damage.

My brother in law is also looking to get back in - although he and I tend to differ on the home condition and tenant interaction so I'm not sure how much use my help will be for him.I don't expect anything from these people.

Tenants and unit condition will determine time required.

Just use good fundamentals and don't show the institution a house that doesn't meet all your requirements like resale potential, condition of the property such as newer HVAC, roof, etc.

I made sure that my lawyer had adressed the pet policy in the lease and via text notified the tenant that we needed to ammend the lease because there were more pets on the property than we'd accounted for. 

First, you need to find a good securities lawyer.

If I find a buyer who will buy junk in as is condition with the mission of turning something that is non livable into something livable then that is what I am going for.