My logic runs something along the lines that if they couldn't afford to maintain their mortgage the first time around, I usually hold no hope that they'll be able to maintain rent or a mortgage on the same property the second time.They have certainly exhausted all their cash reserves and are running hand-to-mouth (paycheck-to-paycheck) so until they completely recover, any little thing can throw them back into financial hardship - that's just a risk I wouldn't want looming over my bank account.Having said that, bad things do happen to good people and while their current intentions may be beyond reproach, unless they can clear up their mess on their own, they'll likely be moving out sooner or later - that's where you can step back in and truly help them out.

Let me list what you may have to update, fix, or replace:1) Roof2) Paint (inside, maybe exterior too)3) Garbage Disposal4) Carpet5) Hardwood refinishing6) Ceiling Fans/Fixtures7) Garage Opener8) Door Sweeps and weather stripping9) Countertops depending on material and abuse 10) Cabinet hardware, touch up if they are nicked, scratched11) Appliances (plus repairs when they come up)12) Drains may clog13) Periodic Caulking inside and out14) Possible gutter cleaning15) Air Conditioning and/or heating system16) Pest Control17) Turnover Costs between tenants (power, water, time expenses, handyman expenses, cleaning crew potentially18) Bathroom Exhaust Vents19) Electrical Outlets sometimes have connections burn off (repair expense)20) lock changes between tenants21) Updating of unit to keep it marketable22) all others as this list is not all inclusive.

In either case, typical levels of premises liability coverage are $100K, $300K, $500K, $1 Million, $2 Million... you can get higher liability limits than that (via an umbrella that jumps in to assist once the underlying liability limit is exhausted), but typically most investors have  at least $1 Million per unit. 

Would exhaust 20K on this one, and increase net per month profit by about 1K to roughly 2500-3000/month net for my entire portfolio.Option 2) I have two separate doubles as an option (on in 40s, one in 60s) B to B- areas and B to B- properties, both would net $500-600/month.

@Kathleen Miles As long as you make sure that there is no legal language barring you from assigning the contract for cash, and you make sure that you do proper, exhaustive due diligence than you have nothing to worry about.  

Stanley's contributions to the sport of money are very real and will undoubtedly withstand the test of time!

Because that dryer exhaust is so high on the wall, I'm going to guess that some stackable unit was in there.

Unless you can find comparable rates to traditional 30 year financing, I would keep creative financing in your back pocket until you have exhausted your traditional financing means.

And they make a big production about signing in bidders, issuing bidder numbers, running multiple computers and a projector, reading all the legalese in exhaustive detail, having an actual fast talking auctioneer (who everyone ignores).

After my wife and I had exhausted our resources and borrowing limits, I've decided to take on two partners in the last 1.5 years.