I would love to put everything into an LLC for the sake of protection but again - more digging is needed as I know that will require different bank financing if I go that route.Thank you for the overview.  

I would also suggest getting a good overview of your personal options, and start reading on them.

I went through legal training regarding this subject 25 years ago, but I'm sure things have changed, and I am not finding a comprehensive guide pertaining to Michigan law.  

A high level overview of the numbers.Purchase Price: $125kRehab: $100kAll In: $225kARV $320kI currently have hard money lined up at 3 points and 12% interest, who will lend on 80% of the purchase price and 100% of the rehab.Which would put my initial acquisition cost at about  $29k ($25k down + $4k origination fees)My contractor, who is also a real estate investor may be interested in lending on the $29k at 9%-11% interest, but how would the debt be secured?  

I believe those auctions should be reliable for providing comprehensive information on dangers of those type of sales, or they are simply in the business of ruining innocent people's life.

Perhaps having all these questions answered comprehensively will be useful to other forum users. 

So here is a brief overview of what has happened from 2015 until now:2015-April of 2015, attended a Urban Land Institute (ULI) event in Chicago and met Sam Zell.

Reading comprehension is key!

It starts to give a pretty comprehensive view of what investors should do in a similar situation:https://www.biggerpockets.com/forums/519/topics/48...

The maximum can be exceeded up to 45% if the borrower meets the credit score and reserve requirements reflected in the Eligibility Matrix.For loan casefiles underwritten through DU, the maximum allowable DTI ratio is 50%.See B3-1-01, Comprehensive Risk Assessment for information about the DTI.