I am not an expert note investor.I do have friends that are and the first thing I would do is define what notes you are trying to go after and what is your hold and exit strategy for them??

You have to define the WHY.

By foreclosing in the Roth IRA he thought he would be able to not pay a cent in taxes on the gains of selling the property after the foreclosure.I burst his bubble by defining "self dealing" to him and that it's prohibited.

How are you defining comps?

Define what your niche will be, what it takes to succeed in your niche, how your would define successful deal, and then figure out how to connect the dots.

I would say that at 50k you would most likely have to rely on some type of funding to purchase...although there are definately parts of the country where you can buy and fix a property for under 50k.I'm also not too hot on investing it all in REITs as you don't really have control over the investment.

Could I simply write the purchase price as "current + appreciation at the end of the option term" and define the appreciation as the Q1 2014 average appreciation percent for our city from next year's LA times?

All in broad daylight.

Defining what the goal is with this money is the first thing.

In addition to my comments above, if you want to be ultra literal and logical, consider this...Most people define money as a currency for trade/bargaining.