Inventory is also very low.

Rehab the property with our own cash out of pocket and then my question comes with refinancing the property to a conventional 30 year loan.  

If you have the cash to buy at the foreclosure auction, start looking on the MLS for properties that don't qualify for conventional financing.

@Matthew Spiers If you don't have 2 yrs of consistent earnings then its not going to be possible to get a conventional confirming loan.

If they all try to head for the exit at once that could definitely swamp the market with inventory which would quickly create a buyers market (remember those?). 

This of course makes it difficult to get conventional financing for their next deal. 

conventional financing will slow the process down because of appraisals, underwriting, etc.  

You won't be able to get conventional financing in most cases with an active dispute. 

In fact, even if you have had credit problems, such as a bankruptcy, it's easier for you to qualify for an FHA-insured loan than a conventional loan.More protection to keep your home -- The FHA has been helping people since 1934.

How much rental inventory is available in the area?