They owe $95k on 1st MTG and another $25k on a 2nd that was placed on the property when they went through a debt re-structuring program.

There are various programs for subsidized housing, most notably section 8, that can provide reliable income for you extra unit.

Is water/sewer public or private?

@Caleb Heimsoth agree and working on a few companies who offer fix n flip programs and bridge loans.  

I called Apache County Treasurer and Dawn Yarosh yesterday who definitively told me I can contact them offering to purchase the property if they don't want to redeem rather than go to foreclosure, adding "It's public information". 

According to Chapter Five, “An outright gift of the cash investment is acceptable if the donor is- the borrower’s relative- the borrower’s employer or labor union- a close friend with a clearly defined and documented interest in the borrower- a charitable organization- a governmental agency or public entity that has a program providing home ownership assistance to low- and moderate-income families, or first-time homebuyers.”

Under this incentive program, only about 40% survived the transit.

Skilled negotiator with high aptitude for developing and executing programs leading to sweeping change.

- Will public roads/streets come into play?

Having the septic is no different than having your house hooked up to public sewer, do you think you'd charge separate for that?