I don't want any legal trouble up front.My other concern is safety/securing of the site.

I would like a little more thought on this…as to how does the whole thing work and how can we invest properly in pre-foreclosures to earn secure profits.

If you want to loan someone money, and use a property as security, you need a Deed of Trust or Mortgage, depending on the area.

I too come across deals by interacting with people on a regular basis.

I don't know if you guys know their website but I'm actually a regular on their forum their before I signed up here.

Our buyer will then buy it from us with cash (so yes, we will have actually owned the property for an hour or so)So, if our profit was $40K, are we liable for capital gains tax, regular erned income tax or what?

Wouldn't it be in their best interests to secure a sale and obtain their commission?

What about damage done by tenants in excess of the security deposit?

Some are regular, like taxes and insurance.

As long as I get one key I'm happy, because my first step after closing is to change all the locks and secure the property.I've dealt with worse.