Now go do...As far as your plan, it actually sounds solid, and you want to know why, because you have a plan.

@Laurie Johnson That is so true! 

One legitimate reason he wants you to use his guy is so he can get a good idea if you are truly qualified to obtain a mortgage.  

These are only opinions and in my personal/investors experience I have had the same amount of problems in properties $75k-$100k that I have had in properties I purchase for less than $20kAs far as where to invest I think Memphis, Indy, Cleveland, Dallas, Houston, Birmingham, Kansas City, and Atlanta are solid markets you could invest in with the money that you currently have on hand.

There will almost certainly be third party bidders that will bid and drive the winning bid up, since there is so much equity in the home.Once the auction triggered by the senior lien is over the winner walks away as the owner of the property with a trustees deed.

Also, as far as appreciation, in 2013 the school district surrounding Penn State appreciated 5%, in 2014 4.5%.

As far as I know, there is no real requirement as far as the sales agreement used.

Since an LLC is a pass thru entity as far as the IRS is concerned, I would say no, there are no tax implications.

I just use one LLC for all of mine.You will have an additonal schedule on your personal tax return for the LLC and the properties but it will still be with your personal return.As far as the deed goes, not sure of the process in your state but you can just have the deeded party changed in a simple process and its not that big of a deal/expense.Your accountant can set up the LLC for you or you most likely can do it yourself online through your state web site.The added schedule on your tax return still files with your tax return and will not change your income for the year.Taxes will still be sent to the same address they have been coming to unless you change that, they will be in the name of your LLC not you/your wife's names.

I don't know what kind of C-class location this is, so I can't comment about fair market rents.