The last scenario is fairly easy to resolve but the other can be very involved, using proprietary methods.

I found a broker that goes to distressed properties on auction lost and asked to buy it and then wholesales it, is anyone familiar with this method or have advice on how to make money with these deals.

I have found craigslist to be a pretty good method, however i have noticed that some would like a pm certificate to go along with experience. 

(I ask this because my current tenants pay me by only TWO methods that are SAFE for me--electronically/online or direct deposit in a special bank account)--are appliances tenants or owner's?

A popular method is also finding a seller who will finance part of your purchase (seller "carryback".)

There would need to be substantial equity in the home for this method to work as you will only be able to refi at 70%-75% LTV so the home better be worth around say $175k. 

With that being said if you get lucky you can hut the ball farther out of the park with this method, on a ROI basis, then any straight RE play.I am not sure if this helps you, but hopefully it gives you another perspective on your potential deal.Good luck,Arlen

Calling code enforcement because you do not like his screening methods isn't very nice.You mentioned he likes money so I don't see why he would sell. 30,000 today is better then $400 a month right.

I do know investors that use this method.  

That is a slow route but if done correctly you don't need your own additional cash for every deal.Two other possible funding sources are a business line of credit (once you've built your business and develop a relationship with a lender), or find a private lender to provide acquisition funds.In sum, I don't see a method of obtaining a conventional mortgage on investment properties in need of rehab.There's a networking group meeting tonight so maybe someone there knows the solution....Best of luck.