I am responding as a consumer not a STR owner we had one its lasted for us for exactly one tenant then we felt it was too much work for the return  on investment we do much better loaning money and buidling new homes than to worry about people goofing up our homes :)I do have some MTR you know fully furnished homes in Vegas and those are money makers for us top of the line tneants paying double the going rate for rent.

If it is with HUD, did they foreclose or is HUD servicing the loan? 

You can allocate those proceeds any way you want - as equal down payments or buy one for cash and others with loans - It doesn't matter a bit as long as you use all of the cash and purchase at least as much as you sell. 

Hello all,
I'm looking to buy my first multi-family. I have a large lump sum saved in an investment account for down-payment and any additional costs. I currently have no debt and make under $100k a year. Because of ...

I've also used traditional loans through regional banks and a few SBA loans. 

I can only imagine that they got a bunch of big time investors and business loans to grow this out.

You could get a loan from a local bank or private lender to fund it

This reminds me of a police officer  pulling somebody over without reasonable cause and asking to search their vehicle and if the person does not consent, they’re saying you must have something to hide.

And addressing my item #1 comment, almost always, when a "distressed" homeowner is approached, they initially are grateful to have the loan brought current, but before long they forget the circumstances they were in and you become the bad guy that stole their house.

Quote from @Guadalupe Batana: Learning about different types of loans is always a smart move, especially as an agent.