rent to own just got forclosure notice?

Someone with a rent to own setup (was going to take over the property next month) just had a pre-foreclosure notice posted (this is in Colorado; Arapahoe county) on the property they are leasing.

Any suggestions as to what they should do? I assume that since the property is no longer in good standing they can easily walk out on the contract. Not sure if they can just squat until the the foreclosure sale? They are out net a pretty penny against the rental rates in the area.

Any way I could profit off this?

Landlord-tenant laws are different in every state, but my opinion is that they can squat until foreclosure or until they get evicted by owner, but that doesn’t sound likely.

For you to profit? try to contact the owner and see if you can buy the house on a short-sale. I would check with the tenant also to see if they actually have a purchase option in writing on the house or whether it was just talk of the tenants renting until they can eventually buy. Even if the tenant has a written option to purchase, they probably haven’t expressed interest to purchase in writing. So, pick up the property from the current owner on a short-sale, then sell it to the current tenants at the exercise price - hopefully, there is a good spread for you.