That's why they hire a realtor to sell them for them when they are ready to be sold.Your best bet if you want to try your hand at foreclosures would be to get lists of pre-foreclosures and market to them. 

Lastly, I have no right to tell you whether you are right or wrong for your choice so please forgive me if I come off that way.

If it's a nicer area rental, we'll say we can include them for +$50/mo,  that's the price point 90% of people say they'll buy their own, and it's their choice!   

Real estate is a form of investment that is everyone's top choice.

I have two choices, a conventional 2nd home construction to perm loan through Fannie Freddie. 

Your loan can be sold multiple times and you have no choice in this matter. 

And that is true....but what if I have NO CHOICE. 

That’s the best bet.

The seller wants a larger EM, and I’ll bet it will non refundable, because you’ve had multiple extensions and the seller is tired of dealing with it...if I were their agent I would ask for the same thing, or simply put the property back on the market.

The notice of default and notice of what is to come, may straighten this guy out a bit or it could send him looking for another place.If he intends to bolt, I bet he stops all payments.