If you are reducing your principle and interest by refinancing, that is another vote for cash out refi.  

These type of deals are not for first-timers and almost no one should be bidding sight unseen.

Those market investments can be good if you are OK with possibly losing 5% - 10% of your principle.

If their house is paid off, you would have to just pay them principle and interest and pay the taxes and insurance separately. 

@Dom BarlowCan you get in to see the property or is this sight unseen on the interior?

I frequently make offers based on nothing more than the MLS listing, sight unseen, with a cash offer above asking within 24 hours of listing...so yes.

Also have used Mecari online auction/ sale sight for collectables 75$ for a garfield fishbowl.  

I am willing to bet my mortgage that interest rates will be higher in 7 years, not lower so locking in incredible long term low rates today makes better sense in my book.As to returns, another poster stated 9 years to get the return. 9 years to get your principle back is still a good rate of return, especially when you consider that in 9 years from the day it is built, your investment is still there and likely has appreciated (since it is in CA) so your total return is much higher.

Based on the below how much would you bid if you really wanted this property and were ready to take it as is sight unseen? 

This will be paid off as well according to the PM, no end in sight to the bailout.This is not the only story I know of like this.....So, no evictions because why would anyone....?