Feel free to reach out if you need any advice. 

I know some people that have property free and clear don't care if they lose it and only carry liabliity insurance to protect against accidents on the property, medical or legal bills, etc.Do I have no other recourse but to carry full coverage?

Cost of living is low and entry point for rentals and flips is great. 

Cash for keys, while unpleasant from a moral standpoint, is often the better choice from a cost benefit analysis standpoint.

Your taxable gain / loss will be sales price less cost to sell less your adjusted basis.

I believe that the cost of every legal hoop you make the Trustee jump through to complete the foreclosure will be added into the amount owed and will reduce any possible overage from the sale of the property.In addition, unless there is a fatal defect in the deed of trust, the sale is going to go through and a request for a TRO (which I doubt would be granted) or filing Bk (which I'm not sure would stop the sale since you're not the borrower, have no liability for the debt, your interest arose after the foreclosure began and you had knowledge of the 1st DOT's foreclosure) will not stop it. 

I don't think it's worth trying to sue the county over 6k, it may cost more in legal fees.This was my first flip and it has been a school of hard knocks. 

Please feel free to reach out with any leads or referrals.Thank you for your time and consideration.

@Kayla Palmieri read the contract or have your buyer’s agent explain thoroughly as some inspection contingencies require a licensed home inspector actually inspect it, and some even require approx cost of repairs and if seller agrees to that amount then you cannot exit for inspection contingency.

Why pay anyone for anything you can get yourself for free?