But it was under priced for what it was, and I knew that I could raise rent significantly (almost double) so I went through it anyway.Ended up having to replace a floor, but that was the only unforeseen expense.

It's a very difficult situation, and will continue to be,, due to lack of supplies to repair, people / contractors to do the work, and unforeseen structural and mechanical issues.. and MONEY,, FEMA approval for repairs ,, more than likely the landlord did not have flood insurance. 

The only thing that worries me is buying a home w/ unforeseen issues, are you able to get a home inspection before the auction?  

That margin is there because the auction does not afford you the same opportunity to inspect and walk away if there are some unforeseen deal breakers.

Set aside 10-15% for unforeseen issues.  

Depending on how intense and unforeseen issues, that can bite out a huge chunk of 50k alone.

Estimated Repair cost: 10k - I’d love to have 15-20k to put into: deck/step off back/bulkhead to basement/fire exit on top floor/unforeseen updates I assume seller will contend that 10k is not really needed (but wanted) for rehab and that the After Repair Value is closer to his asking price.

Even if you haven't lived in your home a total of two years out of the last five, you're still eligible for a partial exclusion of capital gains if you sold because of a change in your employment, or because your doctor recommended the move for your health, of if you're selling it during a divorce or due to other unforeseen circumstances such as a death in the family or multiple births.

The only concern is we get a rental contract in place with a tenant and for some unforeseen circumstance the deal falls apart at the last second and we don't close.  

Not in SA but I would say 10% margin is too slim. 1 error or unforeseen issue will wipe out your profit.