Unlike passive rental income, the income from an active trade or business is subject to self employment tax (a nasty 15% tax commonly referred to a "social security and medicare" by working folks).

Does this mean the only way to safely buy at these auctions is to secure redemption rights prior to the auction, by contacting the current owner and negotiating a deal?

This type of investment offers relatively secure, high returns that make the fees of self-directed accounts worthwhile for me.  

While my full time profession is in the securities brokerage industry, I have been working on the side as an amateur RE investor. 

I have an offer out on one in Crowfield Plantation and I'm hoping to secure it.

You pay PMI, they have the security of a property with 25%+ equity.I realize you'll have closing cost, but a small price to get out from under the PMI (and screw it to your current lender). 

So I'd need a secure 6 port router at least.This is self interest also, it costs $70 for just broadband from Comcast or Verizon here.

Trust that RECFs are here to say and are going to Rock the Real Estate, Lending, and Security Institutions to their core.  

Although nothing is ever guaranteed in real estate, the money I pour into this property seems very secured.

@Emilio Basa, your should try calling the company that @Middy Matthews suggested, since you are both in the same state and a referral is usually worth its weight in gold.