Also is there a method of extracting the equity from both properties in a single transaction?

You would be wise to find a decent agent who will broker the transaction for a reduced fee and represent you both, and split the cost.You're doing a real estate transaction in the most litigious and law-choked state of the union.

When asked what happens if some parts of the work come it at a lower cost, he said that would be his profit and if it's higher, it would be his risk.

If your going to buy a duplex in Memphis you better make sure you looking at something at a base minimum of $150k or better as anything lower will be in those bad areas that you won't want to stay in.

The downfall to that is that we spent too much on higher end finishes when we could have gotten away with lower cost items.

Our prices are generally lower than Austin but wages are too.

I think If you find a way to lower your expenses you will essentially have more money to do flips.

I use this type of formula for every RE transaction to get an understanding of how the numbers look in different calculations.

No bad debt (credit cards, cars, etc) and lower expenses.  

They will probably re-list with a lower reserve or send out for more standard MLS driven REO listing.