My husband handles the majority of the contracting side of our business and I know he is always on the hunt for skilled tradesman.

@Ryan Slicer, Generally speaking, Solo 401k has several major advantages over an IRA, if you qualify.

@Angelo Caruso I would determine your reserve based on the age of the property, the age of it's most expensive limited-life components (roof, HVAC, oil heater?

Option #1 will most likely meet that criteria, you can price for any major repairs/cap x improvements and negotiate those during the acquisition, this will help you hedge against major items breaking down once you acquired.   

Majority of the auction properties here in my area are bought by the bank.The few that sell to investors are at high prices with very little profit margin.

I had not been in it in years but been having major problems with them destroying outside property and rent for a year hence why I did not renew lease. 

For the majority of newbie investors, this situation is not very realistic, as not many of us just have $200k-$250k lying around.

I had not been in it in years but been having major problems with them destroying outside property and rent for a year hence why I did not renew lease.

I understand the major points on how each one is worked but I have many gap questions about Title companies contracts, buyers, lenders, etc. 

All the carpets are ripped out and the old wood subfloors are exposed (i suspect that is where the majority of the smell comes from).