How or what mechanism are you using (like a 1031 etc) that allows for the refinancing to be tax free.

Mechanics liens will get wiped out in foreclosure assuming they are behind the foreclosing entity.You ran a title search and were told its insurable...Still have the stomach for it?

You can build a lower price in, like purchase at the appraisal price on a particular date, or any other mechanism you and the seller agree to. 

Can’t really tell from the picture about the roof, but assuming that is in good shape, and mechanicals are properly working, you can get out of that house anywhere from 15k to 35k (estimating just based on pictures).

The mechanics of the foreclosure process are irrelevant if it is not a realistic scenario.

I would love to get connected with you and learn about RE investing in Westchester County.I don't have much of experience in RE investing, and I am looking to network with people (newbie or experienced) to see if we can help each other (gaining knowledge, experience, finding deals, and doing analysis).I can certainly offer you my time to help you with your RE investing or business growth.I am a mechanical engineer and my office is in Yonkers so I can certainly offer my time after 5:30pm or on weekends.Would you be interested in discussing how I can help you over coffee sometimes?

@Cecile Poyet the fundamentals of the housing market in 2006-2007 were a mess which lead to the housing collapse, however, today the fundamentals and mechanics of the market are good so while there may be a slow down in housing there will not be a collapse.As other experts @Russell Brazil @Caleb Heimsoth and @Jay Hinrichs mentioned if you hold for the long term it doesn't matter the value of the asset.You buy low sell high. 

There are mechanisms in place to challenge a banks appraisal.Everyone above is right.

We keep the major systems running well - electrical, plumbing, roof, mechanicals - but expect sheetrock repairs, missing/broken windows and screens, painting, carpet repair/replacement, junk haul-out and major cleaning when a tenant leaves. 

And as a previous poster intimated, there is safety in numbers, meaning, the more the properties the greater the risk reduction in such a self-insuring mechanism..