DeAnna Stewart I would be concerned with this type of arrangement as what if she stopped paying those loans or filed for bankruptcy ?

If the homeowner hasn't filed bankruptcy just minutes before the auction, the property is yours.

Or that the current tenant could be near bankruptcy?

So they lost a few properties and filed for bankruptcy but managed to save a few properties and remain ok after a few years of restructuring.

We also checked that all 4 adults have no evictions, criminal history, or bankruptcy....

Tenant has to be in a year, on time, no bankruptcy, no evictions last 5 years, financials, etc.

I am not aware of any waiting period in between FHA loans, UNLESS you have a delinquent situation like a bankruptcy or foreclosure.In fact, FHA will even allow you to carry multiple FHA loans under certain circumstances like a growing family, a relocation, or co-signing for a family member. 

Have the seller file bankruptcy that stops foreclosure

There will be bankruptcies and a writing down of losses, prices will adjust and life will go on.  

He has bad credit as a result of his previous marriage and also filed for bankruptcy  due to ex's cancer bills.