As for the payment on the 15th, no it would all go to principal....your following pmt on the 1st of the next month includes the interest for prior 30 days.

Ask the agents to brings comps and several examples of prior listings.

With short-sales you'll have plenty of time to obtain financing.With foreclosure you have to assume the worst... including the possibility that you'll have to evict the prior owners or some squatters. 

NJ requires the properties to be elevated prior to occupancy which is not practical. 

It is not perfect and requires checking the account and crediting the tenant's ledger prior to late fees being posted but it is more efficient than making a trip to the bank.

@Robert Huizar Likely the prior owner failed to pay both property taxes and HOA fees. 

some ideas I thought of are refinancing prior to deal or using our house as collateral with third party loan.  

Send out a non renew notice prior to their lease expiring.

He also said it was closed prior as a 3/1.What is the best way from a due dilligence perspective to find out which is actually correct?

To give a proposal we at least want from applicant:1. property address2. after repaired value of that property, we will also do our own evaluation3. purchase price4. market estimate of repairs, what an average contractor would charge for the repairs, we will inspect and confirm if client approves proposal5. experienceWe ask for this by email or thru our website and for established clients we may do with just a text message.Again, everyone is different but for us, the collateral property is the most important piece.If the proposal is approved, then we can get into the details, we will have a 2 step process of prior to doc conditions and then prior to funding conditions.Hope this helps, good luck!