I use tenant turner through buildium, and if any prospective tenants inquire about the property through zillow, it automatically funnels them into Tenant Turner's database.

Contracts formed for an illegal purpose aren't just "voidable", they're automatically void.That means that you don't have a leg to stand on in court and that you can even be sued for "fraud in the inducement" (you didn't have both the means (money) and the intent to close on the property). 

Prices aren't going to automatically drop. 

Is this an automatic right of the successful bidder of the 2nd trust or are there any other caveats involved?

I only ask because you mentioned "New LLC" which just automatically brings up new 1099 income in which you would need a minimum of one full year plus new year currrent P&L profit and loss with no declining income to be approved. 

If over a certain amount then automatic denial?

A rental ad on Zillow will automatically post on (I think) Trulia and Hot Pads. 

@Nathan Williams you did not mention what neighborhood you are looking in but you should know that sewage in certain areas around Drexel Gardens are serviced separately by the Ben Davis Conservancy District and that bills will automatically be sent to the home owner as listed with the county assessor.

If I purchase at 170k, will those taxes automatically increase?

If you use a middle initial on one but not the other they will reject it (so a different name is an automatic throwout).