I think it is a pretty typical of rules to control college student rentals.

You're applying this (stupid) rule backwards.

I've never heard any great coming out of that town except for Erin Brockovich (http://www.brockovich.com/)A basic rule of investing is that you need to know what you can sell something for before you can decide what to pay for it.

Don't rule out investing in Dallas though too, that is one of the hotter markets.

I think the old rule of thumb is you'll close on one of every hundred offers.

Assuming that all the sudden the collateral would be valued at zero and I would loose my down payment plus all debt dollars certainly can't be ruled out but is not all that likely and in most cases is improbable.

What are the rules regarding wholesaling a HUD home?

There is, however, a 3 property rule, a 200% rule, and a 95% rule that limit either the number or the total value of the replacement properties that you can identify as replacement properties.

If you find any way arounds conventional rules I would appreciate it if you post it on this thread.

However; as a GENERAL rule, if your property is listed, and someone submits an offer to you for the price and terms of the listing, you are obligated to sell the property or owe the brokers a commission.