And if so, how should I proceed to minimize the bad feeling of the first lender?

The first is a hard inquiry when the lender or mortgage broker etc. pulls your credit.The drop in points is very minimal and for a short duration.

I suppose over the years I can try to minimize the risk of the entire portfolio and use some of the profit to pay down debt on some properties for a better overall picture too?

I have loans at 5-7% for 30 year fixed so te thought is to sell enough property to pay down all the debt and then sit on the minimal amount of properties with no debt with cash flow that will provide for all living expenses.

It could have been a bank in second position like you said, but the way it worked seemed strange...When the lender's maximum bid was the judgment amount the bank's agent would say something along the lines of "the plaintiff bids $100, up to $x" (loan balance) so the investors would know how high the bank would go and if no one was willing to bid over that amount the bank bought it for only $100 to minimize the doc stamps.But when they were willing to bid over the balance the agent would say "the plaintiff bids $100, up to an undisclosed amount in excess of the judgement."

I'm interested in minimizing time and expense in the event of buyer non-performance.

You can also rent space at the library or the Goodwill Centers, their fees are minimal and sometimes free.

There is a minimal amount of interest that the IRS will force onto the Seller in most cases either way you set this up, it is referred to as Unstated Interest.

The reason I ask is because I'm a bit overwhelmed at HOW to begin, especially while working a full-time job.Ideally I would like to work with a Mentor or partner with someone in the beginning to minimize mistakes and learn from someone who's "been there done that" as opposed to trying to do it on my own.

then your out of pocket expenses are very minimal.