Look to see if proper permits were pulled.

What is illegal (in my state anyway) is to hold yourself out as acting in a fiduciary manner, representing someone else in an agency relationship in a real estate transaction without being properly licensed in your state to do so.

I am starting to guess that i did not word what i am looking for properly.  

Just because somebody says they do things a certain way all the time does not mean that is the proper way to do it ...

My questions is; are my only options to either wait for the lease to end and notify the tenant with proper notice that he can not renew or will I just have to give cash for keys a shot and hope for the best?

(Still confused about why there would be a sheriff's sale, since you didn't say there was a tax lien on the property.)Finally, if real estate investing is something you are serious about, you are going to have to learn how to properly value a property or find a realtor you trust to do it for you. 

I wouldn't be that concerned because the title company will make sure the proper owner is selling.

Under the hierarchy of home liens in Texas, property tax liens are only superseded by certain properly filed federal and state liens.  

And use the proper kind of tape on the joints. 

To get the real facts and see if and how a deal can be properly structured fitting the owners situation?