Your margin is very slim and on a SFH you are highly likely to be negative cash flow monthly.

I'm assuming that they are both trying to do you a bit of a favor by selling you property with instant equity -- I would try to work some creative financing with them (or other relatives) - I think your chances of going through a conventional lender (at any interest rate) will be extremely slim -- but your best bet is to just start asking around your local lenders and find out.

Most if not all work do not need permits. profit margin will probably be slim but what you learn and having this experience on your resume is worth 100x more and can leverage that to get and fund your next flip.

the bank does not have a legal right to sell it to you till after the confirmation of sale, you could work out with them a deal prior related to a bid amount though, but someone else could bid. best would be contact the owner and see if they will delay the sale to get a deal done prior to sale, otherwise buy it at sale, or if no one buys at sale you would have to wait till its REO  if no one bids at sale there is a slim chance the bank will sell their bid to you, it not common but does happen once an a while, you would need to go through the bank attorney generally for that, unless you have the right bank contact. good luck. 

@Richard XiongYour margin is very slim.

You can find groups on Facebook (The Red Pill Investor Public Version comes to mind) that have thousands of members from across the country.  

Thanks John, I am interested in multi family but they seem to be slim pickins around here. 

No magic pill.

Sure you could be the exception but the chances of that are pretty slim.

To add to what others have posted, Texas' robust real estate market means that a very small % of homes have underwater mortgages, which means slim pickings for short sales.