I've had this clause in most of the insurance policies I've had.

Insurance companies may be involved, and may pay a settlement to the lender for the damages, once the two of them agree on an amount.If this was a desirable area with sales going on, I would say the house would end up selling for something near its retail price in good condition, less the cost of the repairs.

I assume she's not making much cash flow, because the value is high and taxes and insurance would eat that up.

And finally, if they have ANY claim...they should submit it to their insurance co.

What are your thoughts on this statement: " getting the previous owner to keep the insurance on the property in his name to conceal the change in ownership is arguably conspiracy (two or more persons), mail fraud (something related to the insurance will go through the mail either from you or to you), concealment of a material fact, and false statement (to the insurance company about who is the current owner).

What are the taxes, insurance, etc.Look at price per sq. ft. / rent per sq. ft. / median household income / median house price for this community, not the entire city.It is much more difficult to "flip" the house in today's market due to the lending crunch so buyers are fewer and further between.If you can get enough rent to positively cash flow the home, rent it for at least a year.

I originally considered buying one of these properties as a rental, they rent fro around 1100-1200/mo, but after reading about the operating expenses it doesnt seem like I would make any money, maybe just cut even ($650 for mortgage/insurance/taxes, + $600 for expenses is a -50 monthly cash flow).

A preforeclosure sale [short sale] involves the sale of the property by the borrower to a third party for less than the amount owed to satisfy the delinquent mortgage, as agreed to by the lender, investor, and mortgage insurer.

this includes insurances, taxes, interest, etc.

Insurance premiums run $766 a year.Gross rents, with a 10% vacancy rate, would be $5,076.