He has approached mean to possibly work out a Nother deal where I still hold a note for the remaining balance.Looking for some ideas and thoughts on terms I might put forth?

If things don't work out, you might have to give the tenant buyer some money to release the cloud, if you can find them.

Also you can't charge for doing it yourself so hire the work out including sealing the inside of the garage.Hope it helps.

I would go with Option A as the numbers workout, and if they had an offer for more than, thats ok. 

So if I skip trace them and they wanna work out a deal before it’s auctioned is that possible?

As long as you have good enough resources and planning I think it can work out fine.

So I was wondering if it is a bad idea to just use the pictures from the listing to decide on making an offer or not (this is assuming the numbers work out). 

There is no lost income and the only extra expense is a little money for utilities along with any improvements in between tenants.It could work out well if you get in front of it.

If so, how did it workout?

Experience has taught me that they rarely work out, one always has crappy credit, neither can afford the rent, one has a boyfriend or girl friend that crashes semi permanently, one invariablt moves out, the other can not afford the rent, they want to move in another room mate etc, etc.