CA OR and WA have very specific laws as it relates to what you can and cannot do with a homeowner in foreclosure you should read those before you do anything.. they have severe penalties for violators..Once you figure what you can and cannot do legally.1. as Wayne above state Credit is trashed. your bringing no value there In West coast Purchase Money Deed of trust foreclosure  credit is trashed and bank has no right for a deficiency judgement. 2. 

Here are the rough numbers on one of the houses, both are similar:Total investment (acquisition, remodel, carrying costs) - $200,000Current value (after netting out selling costs) - $270,000Potential Rent - $1,500/monthI can do a refi and get my $200K back out of the project, that leaves me with a mortgage payment of $1,400 including taxes and insurance (assuming 30 yrs. at 5.5%). 

I am a home owner with a little bit of equity.

I've dealt with distressed homeowners needing help over the years and know a lot from that angle, but I've become interested in flipping and wholesaling, it seems like something I could do well, which can  help desperate homeowners needing help + provide some financial relief also to walk away from their home and avoid foreclosure.

But things get more complicated when a lot of these people renting out their basements illegally are also not paying taxes on the income... and then theres Insurance & liabilIty Issues as well. anyways, I personally am trying to find a way to do things as legally as possible.

Once you buy it and put a renter in it, you might flip out because you won't get the Smith's  home-owner/primary-residence discount and your property taxes can pop up 2x, 3x or some other amount depending on where you buy. 

Talk to an agetnt the specializes in 1st time homeowners.

This is what many homeowners will do when they purchase a house.

It's on the homeowner to maintain the property though. 

At $89k ask, there are $5,500 in closing costs ($1,500 of that is tax prorations) and then $2,100 in prepaids (insurance/taxes).