I would essentially be renting it at cost, with an extremely small to non existent profit margin especially since whatever money I would make after mortgage and HOA was paid, would have to be rolled into an emergency fund for the condo in case and when something will inevitably need to be fixed.

Almost every state gives you credit for taxes paid in another state. 

From that point whatever the small difference from $400 is vs the carpet bid will either be owed by her or paid back if the bid came in lower than $400.3) Lastly, this is not someone that usually pays bills on time or has a ton of money.

Some court cases may be settled (ie the tenant paid) or a warrant of restitution was issued (a sheriff showed up to the house to evict the tenant).Every state is different but I’m sure your county has something.

I feel I paid a good price for the property.

All my money has gone to paying down high interest debt, and now that debt has been paid.

There is no point in calculating cash flow based on a mortgage having paid a DP since you will then be mixing cash flow you purchased along with cash flow from the property. 

They paid cash for a property (SFH) and titled it to their LLC.

The last home owner can buy the building back from for what you paid at auction. 

The seller hasn't paid damages and the 3rd party abutter has an opportunity to appeal.