@Bryan GalazI bought my first two houses with a HELOC from my house.

And no, the attorney can't broker the sale of the property.It's very simple, if you want to buy a house in foreclosure prior to the auction you MUST deal directly with homeowner.

This almost seems like a loophole, that I could buy a house which had multiple rooms per unit.

Here's how you can find good deals on properties that might need some work or are priced lower than usual:Connect with People - Make friends with real estate agents, lawyers, and others who know about properties that need to be sold quickly or aren't in great shape.Reach Out Directly - Send letters or use websites to contact property owners who might want to sell fast.Look Around - Drive or walk around neighborhoods to find houses that look like they need fixing up.

My plan is to house hack the first year and then rinse and repeat.

If none of the above work, would it be so bad to sell the house? 

I think its not a terrible idea at all and should be pretty good idea actually.I'd recommending reading this "House Hacking" book from the BP Bookstore as your best bet for next step and understanding this process!

Fair Housing may not apply to you: https://www.equalhousing.org/fair-housing-topics/exemptions-...2.

Make sure you get your name on the deed or have some type of contract so they don't change their mind about the partnership after making the house all nice after the rehab. 

Still trying to find a house in Chapel Hill for our 2 UNC student daughters.