Will I only be able to mortgage the purchase price and costs, or will I be able to do a full cash out refinance and tap into some of the added equity of renovations?

Hi Shak,If you have added value by doing upgrades to the property, I do know of programs that can do it with no seasoning.

they're often much more expensive than they appear because they have deferred maintenance that has been adding up over decades. 

@Scott Ray the way you have structured the investment eliminates double taxation situation, but as as a Canadian resident you are required to report the income here in Canada.

I do not see that home prices have dropped 2-3% and this is a lot of added savings in additional to a downpayment if so. 

Take the few extra hours it may take to originate the bank loan and divide it by the added finance charges and its normally more than most borrowers time is worth.

My figures are below.TaxDeed Winning Bid: $489.00 (My Bid May 2013)Property Clean-up: $450.00 (mowing, trash removal)Taxes & Insurance: $80.00 (2013 & 2014)Sale Advertising: $130.00 (Signage, Newspaper Ads, etc)Filings & Legal Fees: $245.00 (Deed, Lien Releases, Sales Agreement Docs)Total Costs: $1395 (approx)Sold for: $3250.00 (August 2014)That is better than the 25% I would have received if the property was redeemed during the redemption period.

I tried in my market which is the 2nd biggest to New York, so pricing for ads was really high and the return was not great.

I added 5 properties this year. 

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Understand you can not eliminate all risk, only mitigate it.