It was an off market property that my realtor found while I was out of state.

I can see in states like California, you would end up with a squatter tenant pretty easy, and then you're screwed? 

Hi, pre foreclosure in all of its permutations, before the bank sends Notice of Default (NOD) or efter which is state even county dependant but often starts a 4 week clock till the trustee auction are the 2nd most difficult deal scenario and IMHO only experienced investors should bother, the 1st most difficult deal scenario are bidding at the court house steps on lord only knows what is being auctioned off sometimes even 2nd mortgages, you need to do so much home work to attempt to reduce your risk at the court house steps...Pre foreclosure no one talks about these issues, always about the nice sounding stuff like "motivated seller" get a good deal etc etc both are usually not the case.- 95% of folks in pre or post NOD want to stay in their house, keep their house inspite of them 100% will loose the house at the auction. 

Also, don’t forget while the parents are going to get hit with a $30k+ state taxes bill.

i would not buy a random property in Alabama that you find on Zillow and turn it over to people you've never met just because the price point is appealing.here are some threads on how that can go:https://www.biggerpockets.com/forums/48/topics/1160450-run-i...https://www.biggerpockets.com/forums/12/topics/1215726-break...https://www.biggerpockets.com/forums/48/topics/1137397-balti...i own property in 3 states - happy to answer any questions you have.

At the price point you qualify for, I'd be looking at a more landlord friendly state with more approachable price points.

typically no special license is needed when doing it for hard money loans that I am aware of. there may be states like california and nevada that are tricky where lenders need a license of some sort but for most part brokers i have seen are not licensed. 14 or 15 states require state license and NMLS registration.

Great questions, and I will be totally up front in stating how new I am to all of this.

Then it's them unable to sell in the money, and buy a new one cause rates locked up the previous buyers.The 1st point is the real state of unemployment.

I may look at out-of-state investing in the future, but I think good deals can be found locally (which I think you acknowledged).