When you purchase property it is a Fixed Asset but you have to separate Land from Building and Improvements. Your basis in land can not be depreciated or cost recovered until you sell. Tax assessed values are a recognized way to separate land from building. You do this after all original charges - closing costs - are added to the asset.
And you actually have two loans, one with bank, one with seller. So you need to create two accounts
You should avoid entering a beginning balance for s loan but should instead post the money movement as it happened- example loan funds buy the building or pay for a remodel.
You do not have to delete the already recorded mortgage payment checks - just reassign the details to principal and interest according to the amortization schedule or bank statements.