He said that he doesn't have insurance on the property so no property adjusters have been out there.

See what they gravitate toward and adjust the offer accordingly to their underlying interests.

So, in fact, your rental gave you 2.1K  (1K in cash flow, and 1.125K in tax savings from other income).Of course, this is actually more complicated as the income above is the AGI - adjusted gross income = an individual's total gross income minus specific deductions, the tax % corresponds to your tax bracket, the deduction applies to 100K income, gets prorated up to 150K and then you can't use it (if you make more than 150K AGI, you'll not be able to deduct the rental losses...unless...and there is layer after layer of complexity).So, yes, depending on a carefully alignment of stars, you can have negative cash flow and, due to your specific tax situation, end up saving money.

If there are substantial changes in the rental market, then the company can adjust their policies to reflect the change.

Their prices are meaningless.REOs can only be compared to regular sales if the condition adjustments are made.

Then check your leases and see when rents can be adjusted. 

I am running into a problem....I think there are some potential risk adjusted returns on certain Sheriff Sales, however I NEED to get into these properties before going to the Sheriff Sales and bidding up to my limit. 

How do you feel about the deal if I make those adjustments? 

Payments will be adjustable, normally based off prime.

I have an agent who can pull comps for me, but when the comparables deviate from the subject property, I’m not sure how to make accurate adjustments.