This means that in order for a title insurance policy to be provided to the purchaser, the recorded deed will have to be payed off out of proceeds.  

At the very least, I plan to research the market to determine the price points for either apartments or condos, and then maybe back into the costs with an assumed return to see if it's even feasible.I'm thinking the options for this project are:- Continue with the project as is (construct and sell apartments/condos)- JV with another developer- Sell the property as isHow should I proceed with this project? 

Either make your offer to record owner /seller (your principal) subject to clear title (meaning liens are cleared by escrow during sale and THEIR proceeds money will be used to clear) or you agree to purchase accepting these problems and YOU use YOUR money to clear up later.

Or, they can walk away, the property is sold and usually the property sale proceeds won't exceed the loan, if they do, the remainder of the sale proceeds can go to the estate or however it was set up. 

I did start reading through previous questions, but we're in a bit of a time crunch and looking to get a specific answer.Can we use proceeds from a 1031 exchange to payoff existing mortgages on investments we already own?

The seller pays the commissions out of the proceeds from selling the house. 

Sounds like you have a lot of due diligence to do before proceeding. 

Account Closed If there is a lien on the property, that should come directly off of the top of the proceeds.  

Thanks for the advice, will wait until a signed contract to proceed. 

Can they take the property, auction it, and keep the proceeds?