We did not meet their reserve price so I thought that was my out, but Auction.com said they will still submit the bid to the seller if you are within a certain range, which I was (fabulous).

Hello, do you separate your cash flow into a separate account from your reserves for repairs, cap ex etc?

When you sell an Option to Buy, all you are selling is a short term "reservation" for that buyer of the "option". 

I would build in a reserve fund for your cash, instead of 53k I would budget for 60k-70k at least in case you run over on rehab or during the 6 months of rehab you have utilities, property taxes, etc. 

How can I vet the person to confirm they are legit and not a scammer? 

If you are a long term buy and hold Investor, not over leverage, have cash reserve, the next correction is not scary at all.  

The mortgage would cost you almost twice rents, then factor in vacancy/repair/capex reserves and you are majorly negative cash flow assuming you are financing with a typical down payment.

I would confirm your expenses.

Waiting on hoa reserve numbers,bylaws, restrictions and etc... if everything comes as expected, I  would like to buy cash.

Once he confirmed that nothing happen and he is ok, but he failed to communicate on time, then I move forward with telling him the importable of this job so I can move to the next project.