Having just come from the midwest this was a very popular method....what some of the easier first real estate buys that could be used as rentals.

I would never try to trick a mortgage company in any way as this could possibly be mortgage fraud which would be charged as a federal felony.

The single most important thing you MUST do is get a title report prior to the auction (sometimes referred to as a preliminary title report, letter report or owner report).The title report will reveal what lien position the foreclosing lender is in, as well as if there are any other "skeletons" in the closet of the home (i.e. federal or state tax liens).

Accepting a tenant backed by a Section 8 voucher, and agreeing to spend time/effort above & beyond what would be required by any conventional market tenant are 2 mutually exclusive things.I'd be happy to accept a Section 8 tenant, so long as the following was understood in advance:1) The Housing Authority (not me) must fill out all paperwork regarding my home, and send to me for easy electronic signature.2) I must be compensated for the time my home is removed from the market, while awaiting the Federal Inspection - assuming I find a qualified conventional tenant willing to rent during the inspection waiting-period (a per diem for potential rent-loss). 3) The inspection must be scheduled with consideration for my convenience, and I must be compensated for the time taken to travel to the property and meet with the Inspector.In other words, my total "charge" as a PM to process all paperwork & handle the Section 8 scheduling/inspection would be a reasonable $100-$150.

Although more recent federal bankruptcy laws contain more protections for landlords, I've heard that it is still possible for a tenant who files bankruptcy to avoid paying 1 - 2 months of rent before they may be evicted. 

The IRS will enforce the estate laws on a federal level no matter where the deceased was domiciled.My original answer took into account the situation regardless of whether estate tax was paid or not.Let's say your mom bought this house in 1950 for $10,000 and it is now worth $400,000.  

Downtown Seattle up to green lake are very popular areas, but unless you want to compete with 10-20 cash offers way over asking price, and accept 3% or less cash flow, south of Seattle is a great area to invest and see both great appreciation and cash flow. 

Being a landlord or property manager you have to be ok with not always being "popular".

Second, as a foreign investor, you will likely have FIRPTA issues to deal with (Federal withholding at 10% to 15%) and CalFIRPTA (California withholding at 3.3333%). 

It's two duplexes in a popular area of town that's currently being revitalized.