After that you should post a 7 day notice or whatever notice your state requires.

Preforeclosure owner finance wrap, paid off the default payments and taxes with cash and assumed the owners loan.

It's a good practice to overestimate costs and underestimate after-repair values (ARV) to keep your expectations realistic.

I know I'm getting the tax benefits of depreciation, the minimal positive cashflow, and the appreciation on the property, but It's pretty much a long term play of slowly raising rents annually to increase cashflow, which will eventually get basically reset when my loan goes P+I in 10 years.

Any additional will be refunded a few weeks after the auction. 

(gross rents $4900; 8% PM; mortgage+insur+taxes = $3600/mo).

Check with the county to see if expansion is possible, if not, the extra space may not be legally usable.If the deal still makes sense after factoring in potential costs, negotiate a discount.

Some properties appreciated double during this cycle and the rents still covered the mortgage after a cashout refi. 

@Hunter Duplantis what @Gino Barbaro said is exactly what I was going to suggest.When you have vacancy is the time to experiment and apply your original thesis.I’m not trying to play Monday quarterback here but, you should be highly confident in where the rents should be well in advance of having a vacancy.That being said, after confirming competition rents on websites (I’d also recommend Craigslist and Facebook marketplace), you should be in alignment there.  

Preforeclosure owner finance wrap, paid off the default payments and taxes with cash and assumed the owners loan.