If you're unwilling to take this risk then you're better off just getting paid for your time and letting the property owner worry about the end result.

In the case a debtor is unwilling to cooperate, as @Greg H. states, it may be very difficult to collect.

Well, some states (like OH and FL, but not NC) have seen massive abuses in the real estate mortgage default space a decade ago and changed laws 6-8 years ago to attempt to curtail people who were financially unable or unwilling to close on "contracts" to purchase. 

However, difficult tenants who are unwilling to cooperate for whatever reason can drag on the scenario for several weeks, even months, costing the landlord thousands of dollars.First thing first, make sure you get all communication in writing.

I'm in Austin, and I'm seeing many sellers priced 10-15% above where they should be and unwilling to negotiate much, so houses are just sitting.

Don't be unwilling to give a firm NO with tenants/prospects.

If they're unwilling to do that then you can get a traditional loan (if there's enough time before the auction).

Why do you think the bank was so unwilling to budge?

From there how much money in terms of actual cash you wish to use for the down payment and closing costs.When you negotiate the price of your home, if the seller is unwilling to pay closing costs, hammer down that price and then have them raise the price say 3%-6% to cover your costs, prepaids, that are part of the closing.

I don't get why people get jealous when someone makes a lot of money on a real estate deal, they are very risky and it takes skill most people don't have and are unwilling to learn, so IMHO you deserve every dollar when one goes right.