I'm in Chicago and I'm looking for better ways to invest other than a traditional loan.

Traditional 20% down rentals6. 3% down 2-4 unit FHA programs7.

It would be a good idea to get the derogatory items removed from you profile.  

Kyle M. you can do that, you can even bill them all together on one bill if you like, just itemize it so that they can see what's going to what.The 'best' way to do it would be to have the water company come out and put an official water company meter in for each unit, but I don't think I have to tell you ... that won't really help your current cashflow concerns!  

NOW you can flame me for posting such a worthless trivial item,,,,but keeping this in mind with how you sand it isnt. 

 $5,000 (could go with cheaper laminant and save $1,500)4) Gut the two small bathrooms $7,000 (Replace bisque jetted bath tub with white standard tub, reframe leaky tile shower, replace vanities/ toilets.)5) resurface kitchen cabinet doors $1,6006) granite counter top ~$3,0007) Remove structural wall separating living rooms $2,0008) GE appliances $2,200There is other work to be done (HVAC, foundation, paint etc.) but items above are the ones with potential for cost savings. 

I self-manage, @Fan Bi, with a regular man to do lawn, trash, and minor repairs, and a contractor for other items. 

2)  If property was sold either by a traditional sale or a short sale, the second lienholder would have had to be paid off to clear the title Is this correct?

A good management company can stay on top of these items as well as the day to day operations.

I am looking to purchase a home through auction for my family and I and the details are as follows:Wells holds the lien and there are no junior or other outstanding liens.It was established in 2011 at 175k and the property owner stopped paying over the summer so I think it's in the 161k range for what's left on the mortgage.In talking to Wells they said that they were not listing the property for auction but the owner was... yet Auction.com lists this as a foreclosure property.My father would partner with me on the cash for this deal until I can grab my traditional financing but he is worried about being on the hook for more than we expect.If I have checked with my recorder of deeds for any extra liens or overdue taxes, sewer bills, etc, can I be on the hook for anything more than my bid price if I win?