3 BR/1 bath asking $170k.Taxes are $9,062 (although I saw at least one other figure on a different website, I went with the highest)Here are my assumptions:closing costs - $4,000rehab/initial improvements - $5,000 (this is a blind guess because there are no pictures of the inside available, but let's not focus on this number right now...)Rent - $2,000vacancy - 8% ($160/month)property management - 8% (the calculator I used (downloaded from BP) uses net rental income for this, so it's about $147.16/month)maintenance - $1,000/yearcapex - $160/monthinsurance - $1,000/yearwith a 25% down payment and 4.5% thirty year financing for the balance, I net a whopping -.82%.  

As a personal finance matter, I balance my checkbook every month and follow-up with uncashed checks.

Now the terms at these auctions are usually $5,000 Deposit in Cash or Certified Funds due the day of auction; balance to 10% due within 5 business days, and Close in 30 days.

You mention the owner has paid $70k on the mortgage but that isn't a number that matters (since who knows what interest rate he's on or if he's made any extra payments), what matters is what the outstanding balance is on the mortgage and can you offer them a purchase price that is A) Fair to the owner, B) Helps them sell with some amount of equity and C) Gives you room that it financially makes sense.The numbers change based on if you want to flip it or rent it, making the question "does it make sense" different based on the direction you choose.In short, I have no idea how much I would offer...

The most beneficial item here is that the interest rate (8% or so) was still was accruing on my original balance (while I'm borrowing my own money).  

The only reason it is structured as unsecured is if 1) the borrower's net worth is substantial and it's basically a credit card or 2) collateralize funds cannot be secured for a specific reason (such as high volume inventory purchase/sales) but the ave balance stays constant.

The gains are subject to UBIT and then the balance goes back to the IRA.I can see that you are confusing UBIT with the similar UDFI.  

At this point, I would use all rent payments to pay down the loan balances of the 10 homes (1 house at a time) with the goal of having all the homes completely paid off by year 20.  

We could not officially sign the papers until NASB turned over the money, but NASB would not turn over the money until we had signed the papers.Fortunately, we were able to get a short-term loan for the balance, officially buy the property, get the NASB mortgage, and then pay the short term loan back within a very short time frame.Now I want to buy another property with another friend using SD-IRA's and I don't want to go through the same process.

I believe in a balanced lifestyle and humbled by a greater purpose.