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.  

Make the purchase then convert to SBA loan. 

Purchase price: $170,000 Cash invested: $150,000 Renovation and hold plan.

Well, excluding the single family home that I am planning to rent out in NC in the next week which started as my primary home, this truly is my first multifamily home purchase with an intent to invest.Now, to answer your question, is it wise?

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. 

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

Purchase price: $196,000 Cash invested: $42,000 Sale price: $369,000 Contributors: Peter Vekselman Partner Driven, in collaboration with Seth Choate, successfully completed a deal on Pine Cone Way, Mountain Ranch, CA.

Purchase price: $158,000 Sale price: $200,000 Contributors: Peter Vekselman Partner Driven, in collaboration with Kim Morris, successfully completed a deal on Devon Drive, Albany, GA.

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.