So, If a house with a basement already has a finished full bath, would I run into expensive modifications to add a kitchen sink, drain, and dishwasher?

They often push a deed in lieu or loan modification, some just tell the seller the issue is taken care of and let a foreclosure occur. 

My take is that if the LLC obtains a wholesaler licenses allowing for the tax-free purchase of materials used in repairs and maintenance, those materials would be taxable to the owner of the property thereby necessitating the remittance of sales tax from the LLC to the Comptroller's Office.Could someone more experienced with Texas property management chime in and guide me?

Property market value: $131,000(has increased from $103,000 in 2014)The comps for similar homes are $134,000-$140,000Owner says tenant is paying $1250 for rentI got the owners contact info from a loan modification list and he called me to get my offer price.

I realized the other day that although I have made some contacts outside the loan servicer for attorneys that handle foreclosures in the area I have my note (s) in, I don't have an attorney on tap for drafting/reviewing/assisting me with the other paperwork such loan modifications, mortgage satisfaction, deed in lieu, etc.  

Another option is applying for a loan modification, however, some of them are self-employed and can’t qualify, so the only other option would be to sell their homes.

If that's the case, you arent' covered.It's supposed to be to get a building permit to put in an extra kitchen, (i.e. to make more rentable units) the permit would only be authorized if zoning at the time allowed the quad....or the waiver was granted.Does your seller warrant that all modifications were done to code with legal building permits?

The lease addressed this and stipulated no modifications without authorization.  

so sponsor is doing all the work including due diligence, mitigation, foreclosure, modification, accounting, etc.

This is how it reads: "All parties to this Note, including maker and any sureties, endorsers, or guarantors hereby waive protest, presentment, notice of dishonor, and notice of acceleration of maturity and agree to continue to remain bound for the payment of principle, interest and all other sums due under this Note and the Deed of Trust notwithstanding any change or changes by way of release, surrender, exchange, modification or substitution of any security for this Note or by way of any extension or extensions of time for the payment of principal and interest; and all such parties waive all and every kind of notice of such exchange or changes and agree that the same may be made without notice or consent of any of them."