The seller is in pre-foreclosure, but this is no ordinary pre-foreclosure.

As for the rest, there are major differences between Net Operating Income and Net Annual Income (or annual Cash Flow – which I consider the real measure of an investment performance, how much money puts in my pocket on a regular basis) and Cash on Cash Return on Investment.Net Operating Income is calculated before debt.Net Operating Income = Gross_Annual_Rent – (Vacancy + Operating_Expenses)Where Operating Expenses = Taxes + Insurance + Monthly HOA x 12 + Monthly Management Fee x 12 + Repairs and Incidentals (Warranty, Utilities if any paid by owner and/or during vacancy, CapEx reserves, etc., don’t forget the CPA and Lawyer costs) Again Net Operating Income is calculated before debt - what matters more is the NET Annual Income (or annual cash flow): NET Annual Income = Net_Operating_Income - Mortgage_PaymentsAnd that leads to the Cash on Cash Return on Investment: C/C ROI = Annual Cash Flow / (Down Payment + Closing Costs)And I’m willing to bet you don’t get C/C ROI above 10% on any SFR in Austin area (based on these calculations and bought with conventional means, not subject-to or assumptions, or owner financing or other creative financing).

@Bryan Mizell Get pre-approved for the loan will be ur first step.

I'll be buying in Texas, I'm also using the VA loan (Pre-approved $300,000).I'm really set on getting a multifamily house (duplex/fourplex) live in one side and rent the others.

It should explain when you can expect to be paid.2.

I made my first offer on a house I can barely afford as a primary resident (3bd, 1.5ba close to Tufts University), I am glad the owners went with another offer, I would of paid close to 2.5k a month in "rent" for a single room assuming I rented out the other rooms at a near optimal price.

I'd let them go, clean it up and get it rented again asap and consider any loss as what you paid for the learning experience and make sure you button up that hole in your lease for the future. 

I think his current mortage is around $750 a month on a 30 yr.I'd like to pay about $1200 a month total outlay to get it paid down. 

I would expect them to be paid by the tenant, not by you.

From what I've seen, they don't push RE investing since they can't get paid on it(unless they are licensed).