Generally what you have to do is arrange to refinance the loan prior to the balloon payment coming due.For example, we have a commercial loan on a 14 unit property. 

Does this mean the only way to safely buy at these auctions is to secure redemption rights prior to the auction, by contacting the current owner and negotiating a deal?

You might be able to negotiate a deal even if it is company policy to split the listings on your own property.  

The main thing to watch for is that the LLC needs to actually exist prior to you granting it title of the property.

After I received that education on the phone, it prompted me to start calling/emailing others for help too, so it opened up a door of learning opportunities to me that I wouldn't have considered prior.

My advice to you is to go over whatever script you have prior to calling, try to remember the general information you need before calling.

If they had high vacancy rates prior to conversion, why would they suddenly fill up?  

Prior to having potential tenants fill up an application form, I get them to read and acknowledge a copy of my "Tenant Selection Criteria" which specifies all these, so they cannot claim ignorance if I ask for such payments when they are selected.

I will follow-up with Title first to see if any other liens in place prior to moving forward.

My policy for rental screening is "no smokers allowed", however I understand that these tenants pay on time and are nice, quiet people.Because I suppose the damage is already done, should I just let them stay and go through the necessary rehab when they vacate eventually?