Otherwise, it's mortgage FRAUD!

If you don't intend to live there for at least a year, I'd venture to say you may be committing mortgage fraud.

I built two identical homes four miles apart within four months and got values $55K different and when I got the appraisal report I told the appraiser.

Of the ten most common reasons agents get sued, one is FRAUD and the other is misrepresentation of value.

That would be considered mortgage fraud!

This thread is another advantage of becoming an agent/broker as I have the advantage of having the need for the appraiser to call me for access to the property to do the appraiser which gives me the opportunity to offer "assistance" with comps and/or provide a list of upgrades@Lynne Jacob  What you are describing is loan fraud by not disclosing the second lien.

Heuristics are great for quickly weeding out terrible investments, but they should only be the first step when considering the merits of any individual property.Imagine 2 identical homes built at the same time across town from each other.  

I'm looking at an almost identical deal... just double every number.. cost, rent, etc...  

Our two identical buildings and a third owned by Bob next door that is a fifth the size of the first two that produces $20,000 NOI at market.

Generally, it is better to try to come to an accommodation with the senior lien holder before purchasing at auction, but that can sometimes be a challenge depending on the nature of the loan and the identity of the lien holder.