This situation makes me think how so many people believed the lie the US govt told people that their home is their biggest asset Well ah yes if you want to sell and live in a lower priced house. 

Houses are expensive, loans are expensive, no one can make any real money on a 30K (ARV) house. you have to scale bigger, you just have to. my biggest mistake in real estate was going too small early.

I also believe in the longer-term upside of the neighboring city and am excited about the potential equity growth there.I'm curious, for those of you who have invested from afar like this--what single resource or piece of advice will made the biggest impact on my success investing in another city?

The challenge with such a low rent is, that even taking 10% of rents for maintenance & capex, you can still find yourself under water. 

The biggest downside to a basement room, IMHO, is the footsteps from above.

it sounded to me like their biggest benefit was that if you tied up properties under their requirements, they had the buyer lined up and you would earn a fee, but if you build a good buyers list, you could do that and not have to give them 7000.

So here's my question to you -What is your biggest stumbling block(s) and challenge that you're coming across when breaking into the "Real Estate Investing World"?

There are 500k sub-prime loans out there right now 41% of them are in default with late payments not to mention all the forclosures,and there are 700k Alt-A laons 54% of all of them were cash out refi the biggest contributor to loan defaults are negative equity my question is who sets the values on these homes are there any appraisers here that can give us the answer or is it the slow economy thats doing it and if so than its everyones fault that this is happening any opinions ?

They also told me that Trada has lost everything and they are trying to do as much as possible with no employees.They also told me that one of the big challenges at Forest Creek is that many of the investors that had contracts can't buy now because of the loans being harder to get.

My biggest issue is that ANYTHING can happen in 6 mos and then what if they cannot buy the house, and we are back in the same situation as before, with more possible repairs.On the opposition, it is taking the books off the books for now with the possibility of selling the house at list price and make decent money on it even with all of the problems we had.Any tips, ideas, suggestions for this situation?