If this, then, makes the creditor a majority shareholder in the corporation, the creditor could force liquidation of the company.

Do you avoid making offers on REOs if they have major unpermitted work like a patio, reroof, or fireplace or room addition?

Have not heard of such a thing...Every major area has their own MLS (it's not centralized), and in the Atlanta metro area, there are actually two major listing services -- The GAMLS and the FMLS.Depending on which part of Atlanta metro you're in, it's much more likely that an agent is using one of these MLS services and not the other.

But I didn't like the terms of the current deal considering how much work the house needed and my own lack of experience at quantifying how much a major rehab would cost.

Paint after major repairs/modifications are done, not before, and those shiny new appliances can wait until almost last so they don't get damaged in the chaos.

All of this stems from the lender trying to avoid their own liability on the property and serves as a good layer of protection for you.As a tactic you can always ask when the borrower is moving out and don't close if they have property in the home.

Certainly agreed with Ibrahim on his comments...he should get one project and if it goes perfectly give him one or two more and see how those go before giving him any major volume....Is the contractor a GC?

Your concerns are well-founded.A major problem is that there are very few folks in these areas that can obtain financing.

On the other hand, the majority of the risk is passed on to the buyer if you're wholesaling it.

Before you explode like Starbucks, a few words of caution: Have a set amount of money in reserve for turnovers, repairs, vacancies and major issues.