Hello,I was hoping to get some insight into this situation I am currently working on.  I bought a property, whole sale, no inspection, etc.  I know, I should have had one but I knew going into it that it needed a lot ...

Simple things like larger trash can options or having a pool or lawn (constantly need to be refilled / watered) can greatly affect those numbers.Electric can vary widely too based on AC age, efficiency of house (wood vs. stucco), and living habits of the tenants.

We are going to look for a simple single family home a decent neighborhood, habitable in need of some simple repairs $5k or less, and cash flow more than $50 dollars/month on a 15 year fixed rate mortgage.

It would be a good exercise to do some mystery shopping and tour your competition.Don't worry, it's not as difficult as you may think once you get into the habit of checking your comps for a couple weeks - you'll get the hang quickly.

Old habits are hard to break.

Even if it was legal you run several risks.  1) You would permanently damage your reputation in an industry where reputation is vital to get deals.   2) You risk major tax implications related to large capital gains.  3) Comps are not solely based on on the units you want them to be based on.  4) Even if this hypothetical plan worked exactly as you laid out you would be extremely over leveraged and underwater on the other units as you pulled out falsely inflated equity. 

Better than unusual tenant habits. 

Point taken, thank youI've never done well with someone blatantly lying and have a bad habit of not letting it go - nothing irks me more than that kind of stuff.

Cycles, history, bad habits, poor decisions, etc. repeat themselves (unless personal growth is the goal).

It is vital that you understand the tax sale process and the laws regarding tax sale.