(You may want to talk to a local lawyer to ensure you are complying with local laws on this)This will have three effects, 1) it screws your unethical property owner  2) It protects your monies which you might get to keep after the foreclosure and 3) gives you leverage with the bank that is foreclosing.  

Maybe you should talk with someone closer than Utah - @Scott Smith.Did you watch his 109 podcast ?

Talk to @Scott Hollister as I know he is affiliated with a good HML in this area.

Insurance at $90/month sounds high on a property the type you're talking about.

Sometimes talking with them may get a reduction, as some lenders have a price match policy. 

Short of that, I recently heard a tip on one of the BP podcasts...go to Home Depot at 7am and talk to the contractors getting an early start on their work day.

When you get to that point feel free to DM me and we can talk directly.The type of financial structure you describe in the second part of your post is called BRRRR.

She was a great tenant, but one day I get a call from the police saying they have my tenant with them and would like me to talk with her.

If you are talking about the neighborhood on the corner, I know the westgate owners have properties in there.

I am not a financial whiz or a commercial giant by any means, only that I know if we sell this property, the buyer is going condo route, so why couldn't I go that route.I am guessing my biggest mountain at the moment is how could I even possibly get financing for a 30-40 unit complex since in theory we are talking in the multi millions.