Additional resources and tools via brokerage.... 

This is correct. 

Sale Price$171,000 - $55,000 (Rehab) - $13,680 (8% fees) - $40,000 (profit) = $62,320 MAOFrom talking to other investors and doing research, typically a Novation allow more money to the seller, correct? 

Do you have some tool for determining the median credit score for a given neighborhood?

Do not rely on your subcontractors to know/perform the code correctly for your area.

I second Transunion as a decent screening tool.

I don't think you are going to be able to get insurance for two separate living units in a single-family when they are both illegal and likely do not have the correct egress windows (basement) for fire safety which could subject you to huge liability if something happens to either party.

I'm correcting the misinformation you are posting and trying to get further clarification on what you are posting.

Both strategies are great and have their pros and consOne of the biggest wealth building tools in real estate is the ability to purchase a property as a primary residence and put less then 20% down.

Quote from @John Friendas: Quote from @Chris Seveney: When buying at auction you will have zero ability to sue (and win) an auction site if information is not correct.