How to prevent this?

I only see this working well if you intend to sell to a retail buyer when the market rebounds. the poor cash flow would prevent many investors from looking at these properties.

As an aside, I did win the bid, but even though it was twice the house of my current residence and in a comparable if not better neighborhood and twice the tax appraisal, the mortgage balance would have been less than the one I have and that prevented me from getting FHA financing.

The reason that most properties aren't overbid is that there is nothing preventing anyone from making a better offer to the estate before the court hearing.

and is there a way to prevent this problem in the future?

True, some complexes are not FHA approved, which would prevent us from selling them to a buyer who needs FHA financing, but we are buy and hold landlords.

Check whether you will experience that in your state.Those did not prevent me from completing a 1031 Exchange late last year.

When I spoke to the county after finding this info, they were no longer interested in it.This is to prevent people from building an un-permitted structure and getting it approved after the fact.

Dump trailer is necessary, but I'm wondering if I'm at unnecessary risk and how I prevent it?

You can also use them to help (not prevent) hide the owner of the property.