The spread on rehab flip deals typically comes from the rehab work and the treatment of the house as "distressed" when doing the BPO.But at any rate, it's a good deed for the neighbor, as the short sale will ding their credit much less severely than a foreclosure.

Sounds like a great program for Bob.I think I am going to give David Sunlin at Bank of America a call to understand why American Family Properties and Old School Title receive preferential treatment over other investors.

If you acquire the property and hold for 12 months and then put the property on the market, you would most likely qualify for 1031 Exchange treatment, unless you get audited and they can prove that you actually had the intent to buy and flip (not hold).

I am hoping to find an agent who has good relationship with local termite companies and general contractors and can get me a great deal on the rehab/termite treatment.

Other points being that financing limits established tax treatments, financial and retirement planning, funding of self directed IRAs, etc.

This was defined as buying a property, rehabbing it (if needed), renting it out, and selling it after at least a year to qualify for long-term capital gains treatment.

I am thinking that the Mississippi Department of Health in that county may have the VIN because they approve the wastewater treatment plants or septic tanks.The realtor seems to be a novice and claims to have no information and 'couldn't' answer any of my questions 'because it is a foreclosure'. 

Hi Rob, Properties that are acquired with the intent to rehab/flip do not qualify for 1031 Exchange treatment. 

Next - you need to see what type of waste treatment will be required - this can vary from relatively cheap if conventional gravity fed septic can be used to CRAZY EXPENSIVE if an engineered system is required.

If so, you are in good shape and will qualify for 1031 Exchange treatment.