They told us the price of the renovations would be included in the purchase of the home and we were nieve enoough to believe them. 

Make the purchase then convert to SBA loan. 

Why do you think purchase contracts are so long and have such small print?

After researching it a little bit I can see how its not for new investors, there seems to be a few extra ways to get burned on an auction purchase.  

There certainly is a "no fly zone" for purchasing, and criteria that should be followed for a sound investment opportunity.

As part of the renovation, all of these were remedied however the violations were not cleared as I suspect the renos were done without the full permitting.The purchase agreement had a requirement to clear the violations prior to sale but the Seller and I agreed a fairly substantial seller credit to clear the violations as it was recognized there were risks around the renovation work and potential non compliance with permits that I may have to remedy.

Purchase price: $112,000 Cash invested: $30,000 Primary residence turned rental

Purchase price: $583,000 Cash invested: $35,000 Denver STR airbnb.com/h/cute-denver-5bd

I recently purchased my own primary home and I have been prospecting to get my own fix and flip deal.

With a great deal on the first one you actually purchase, you will have created space for yourself to make mistakes.