Then I could avoid both pitfalls. 

You're actually more likely to foreclose on properties that are vacant, so if your goal is to produce interest income, I would recommend that you focus on occupied properties that you expect will be redeemed by the owners/bank.Now if you're talking about wanting to avoid evictions, that's a different story.To answer your question about mortgage companies paying the delinquent property taxes on behalf of the owners:  if the borrower is underwater on their mortgage and not making payments, they bank may decide to walk away rather than throw good money after bad.    

He wants a construction loan, and at the end of the project, turned into a 30 year mortgage (not sure if he could avoid closing costs, but for sure he could avoid selling agent fee). 4.

(Avoid probate?) 

Or pay the repairs in cash to avoid the interest fees?

I'd suggesting avoiding REIA groups that charge membership fees, or any "educational" classes that people are trying to make money at.  

You save on realtor fees and avoid short term capital tax gains (after holding the property for over 12 months)

I'd avoid electric baseboard heat.

In addition to this, the deposit gives you access to the following:a.Advanced Deal Analysis Software – enter the purchase price, rehab costs and After Repair Value and we’ll give you a comprehensive break down including costs, net profit, and potential cash to close.b.Access to Proof of Funds – 24/7c.Contracts and Checklistsd.Additional Tools & Resources to help you avoid common pit falls in evaluating, rehabbing, negotiating and reselling the property.e.Your first evaluation is covered with the deposit.f.If the needed funding is more than 70% but it’s still a profitable deal, we’ll work with you to potentially wholesale the property and still make money on the deal.g.The remaining $1850 is rebated back to you once you resale your first property.8.Just like every other Hard Money Lender, one of the biggest challenges is helping new investors get dialed in on establishing accurate After Repair Values.

Make sure everything is in black and white to avoid becoming grey very fast. 5.