If you are looking in Austin around 200-250K you will likely have a massive rehab budget which typically makes cash flowing a BRRRR rare.

For example, when I take on a rehab I typically deposit the budget into a separate checking account solely for that rehab and pay all the rehab expenses from there making it easy to identify in my bookkeeping.

Typically they are not eligible for traditional financing which implies other funding sources (HML, private Monet, self funded, etc).  

What are you talking about.All of the other investor-members above laid out an easy solution for a typical problem and also accurately stated that a lawsuit is unnecessary and won't work. 

Typically there are no prepayment penalties on hard money loans, so you can limit your holding cost if you're able to quickly complete the project and sell or refinance in a few months. 

@Ricky Hernandez As a Realtor with extensive experience, I typically guide buyers through the process.

What is the seller typically expecting to sell these for, considering that the UPB and legal balance are lower than the property value?

@Karen Seguin, it all depends on what you are trying to convey to your tenants.At minimum, any welcome letter should provide updated contact info for maintenance requests and mailing address for rent payments, and if the legal notice address is different than lease, include that.This can also be a good way to politely remind people of any general rules that you expect them to adhere to.  

Another way is to switch your product from 30 year fixed to a 5/1 ARM so now you're taking program or financial risk to arrive at a lower rate such that you can pass this FHA SS rule (5/1 ARM FHA has a lower rate by up to .50% than the 30 year product typically).

For a single-family, you'll typically need 15% down, while for a multi-family, you'll be looking at 25-30% down.