I was shocked to see that most of the houses I made note of were still occupied, even though the auction was only a few days away (scary to me).  

If you do purchase the property then you'll probably want to give the tenants a decent advanced notice of the intended rent increase so they aren't sticker shocked at renewal.

My first reaction is shock that you could buy a place for 25k, put in only 25k of renovations and the value would be 100k. 

Him being behind isn't a shock, him not pulling permits for 2 weeks after the demo was started is a red flag.

When he got over his shock, asked, "in that case, do you have any complaints and suggestions"?

They would look shocked and dumfounded.

If you do the work yourself you’d be shocked to see just what little the materials cost . something you’d get a 7000$ bill for could cost as little as $1200 if you do it with a few friends over the weekend .

Not saying it's right but to feign shock is... well...

I was shocked to learn that but its the law there 

Seller is asking $189,000 for the property, although I'd be shocked if they were able to get that much for it.