I think the element of time should beppart of the OP question. 

Quote from @Chris Seveney: @Shawn Herring90% of these will end up in bankruptcy as the sellers rarely want to sell as they have no other place to go  Then they become REOs and end up at the auctions/sheriff sales the OP is trying to avoid, but the auctions are dry in most markets.

I am glad OP is consulting a tax professional for guidance.  

The OP stated that "Any property I buy I eventually convert to an investment...".

You know this story, the OP got in over his head huge....bought 2 lots, attempted a custom home build with no experience...wouldn't listen to basic advice from the veterans here who've been getting our collective arse's kicked for decades.

By the way, I'm not talking about leading up to a filing of a foreclosure notice, I'm generally talking about after the filing, because that is what the OP was asking about.

So to pay $40k per unit in just 6-7 years would have required a 100% increase from $440 to $880/mo, and I would have been dreaming about op’s 45% increase.

They also went to the local airstrip and paid a ground ops guy $100 to get pics with a gulfstream that belongs to Rob Walton of Walmart. 

The OP’s mistake was in the belief that those numbers as posted are good/great.  

A lot of people are assuming that the "seller will pay the buyer's agent" but that isn't always the case, ESPECIALLY when the seller is unrepresented (and therefore the property isn't listed on the MLS with a clear, publicly stated co-op agent commission).