If you are to have any involvement with this piece of real estate, you need to find out how it will be a win-win situation.

First, I alert them of the law upon winning the auction and I remind them of it when I sign the PA and a couple more times during the process.

Here are some great books that I have read and have provided some great insight not only in Real Estate, but also in life.Millionaire Real Estate Investor - Gary KellerRich Dad Poor Dad - Robert KiyosakiReal Estate Advantages – Sharon Lechter and Garrett SuttonThe ABCs of Real Estate Investing – Ken McElroyThink and Grow Rich – Napoleon HillThe Seven Habits of Highly Effective People – Stephen CoveyHow to Win Friends and Influence People – Dale CarnegieE-Myth by Michael E.

No win situation.What should he have done in your opinion?

It's a win win for all these different areas.  

This is absolutely crazy since they are paying 400 to hopefully win the offer.

Would they win?

Totally win - win for everyone when you pay cash for a property or wait until it is paid off and then offer some sort of your own "owner financing".

It should rent for $950-$1050/mo and if we can be all in for less than 45k we will consider it a win.

You can try taking them to court for it after the fact and you will probably win, but then you will just have a judgement.