I found a great property that is for sale on a auction.

Some banks like them, some won't touch them.Another thing to watch out for is that if you appraise within the 6 month window the appraiser may use the sale of the beat up house as a comp!

Perhaps in this case the percentage that the Realtor collects for the sale of the home might need to be increased?

^Loaded question.....Most popular methods are direct mail, driving for dollars, auctions, tax and foreclosures sales and networking through local rei groups.  

I have been into the construction business since I was 17 including those college years.Remember that marketing and sales ability are very important.  

My question though is that if the most recent property tax is based on the previous sale price, if your purchase price increases dramatically then wouldn't you get a huge spike in taxes?

I'm currently looking to invest in properties in the Northwest Indiana area that I can purchase for good prices, rehab or make upgrades to and sale.

Remember that marketing and salesmanship are very important in most real estate.The best place to go to when you are selecting is where sales are happening.  

I am 100% sure that I want my first purchase to be a multifamily home in the Bluegrass area.Also I've heard that ZIllow and other housing sites do not contain all property for sale and that I would need to contact a Real Estate Agent for a more thorogh list of my target area's property.

I would suggest that you interview several Realtors and ask them the following questions, to ascertain if they are truly Investor Friendly, or if they are throwing you a sales pitch.1.