A lender can foreclose non-judicially and then seek recourse on the personal guarantee.

Speak to your agent and make sure they're apprised of the system and submission as they're very technical and can get a little complicated. 

They are definitely showing signs of the market shifting.To make it even more complicated, cross one short toll bridge and you're in Tacoma, WA - the hottest market in the US currently.So, you need to know your local markets, and a great agent/broker will be able to help you with that.

This strategy is valid, but is more complicated than what Clint covered in his 5-min video and not without risks or drawbacks.

If the A/C quits in a way that is uneconomical to repair, a couple of hundred dollars at the hardware store or general store gets you some window units that will serve until you can replace the central air.If you just want to replace the furnace, the HVAC people will make noise about "the system will be unmatched", mostly because they want to sell you an A/C too, and a little bit because installing a new furnace with an old A/C can make the installation slightly more complicated. 

If you buy a place that does not need to be rehabbed you can stop worrying about rehab costs.Sometimes the best idea for a newbie is to make your first investment the least complicated one.Try to find a buy and hold property that is cash flow positive and rented.

The more complicated it get, then more fun I have.Happy to connect and answer any questions, give insights.

This is a pretty complicated area and if it's anything more than a hypothetical I'd encourage you to work with a professional.

Besides the fact that some states are judiacial vs non judicial which affects the mortgage and note, do states have other factors that have to be taken into account?

Converting a garage to a residence is sometimes more complicated than it would appear due to drains/sewer issues.