As to how to find those desperate sellers....well, there are many methods (see Kate's post above for some), you just need to find what works best for you.

Since he has been in the business for awhile he has a network of buyers that he can sell to fast (buyers List) or he can sell the car for more money to a retail customer.Wholesaling houses is the same skill set expect the whole sail buyer uses a due diligence period in order to market the home to his list of buyers,or if it is a screaming deal he can buy the house and retail it after the repairs.The whole sail contract has an important clause which is after the buyers names  and or to an assignee  There is nothing really fishy if you have the skills and means to research and complete your deals in an ethical way 

My wife dragged me in kicking & screaming. 

I found a vacant lot in west Tennessee for a screaming deal (I believe).

After screaming at me they calm down.  

As an investor, you have the additional expense of flood insurance on top of regular operating expenses.I wouldn't buy a screaming deal in a flood plain or flood prone area - it's not worth the headaches, worry, and exit strategy is much more difficult.

@Kate Hayes, Multi-family have the advantage of much lower per-door prices but with closer rent-rates to that of single family homes.

More millennials are moving to SA than just about any city in the U.S. and the I-35 corridor between SA and Austin is just flat out screaming growth.  

[iv] While there are certain analysts screaming the “B” word,[v] I just don’t see this market witnessing unsustainable growth.

I do not have enough information to know for sure, but everything about this deal screams scam to me.