So, the bank assumedly "bought" the property at a "real" auction because (1) it wasn't happy wtih the bid amount, or (2) it wanted to pursue the owners for the negative equity, and needed the property to sell at the fair market value.That makes me think it is clear this is the primary lien. 

It is eating into any profit you will see from a sale so sell as fast as you can.

when you say 20-30k fix up properties, is that your purchase price and rehab or the profit you want to make?

That way you have $0 holding costs and it's more profits to you.  

That’s 40% = 336,960 expenses leaving $505,440 as net profit before mortgage.

INVESTMENTS WITH OTHERS□A partnership is an association of 2 or more persons, which may consist of husband and wife, to carry on as co-owners a business for profit.

They are making half the profits and I am making half the profits.)

If you can't even find properties that just turn a profit at all then you might want to revisit how you are underwriting the property.As for getting the better properties, it is a matter of building relationships with the brokers.

You have to buy right and cannot pay FMV with the expectation of profit.

Which car (location) is capable of producing more profits with less work?