I found out that one of the largest real estate auctioneers in Texas employs "straw bidders" to get the price up to what he promises the seller or to "win the bid" when the real winning bid is too low.

Those are the ones I can get the biggest discount on and make the most money, and are also the most "pain in the butt" for listing agents, and the ones they want to get rid of the quickest.If I were the seller, my primary concern wouldn't be about you backing out -- my primary concern would be that because you hadn't seen the property, you couldn't have put together an accurate cost estimate of the repairs, and if you determine that your "blind estimate" was incorrect, you could very likely be asking for additional concessions.Put it this way, if you over-estimated the repair costs, you're not going to give anything back to me, but if you under-estimated them, you're going to ask for a lower price -- it's a no-win for me as the seller.Now, if you're willing to keep your due diligence very short (less than 2-3 days) and I don't have any other interest on the property, then I have nothing to lose, and I'd have no problem signing a contract with you.

In fact, I think I will ultimately come up with a solution that is win-win.

It was no risk - if they win, I split the savings down the middle with them for 2 years. 

You don't have a down payment you have paid expenses.You need to get away from thinking that you have instant equity based on what a property might sell for, that's guru accounting.

Of course that only pertains to filing, winning a suit is another story.

If I can find something where I can break even in Medford / Somerville then option 2 it is (and that would be a win in my book with the market constant appreciation and I'd be saving rent) but good luck with that.

Has nothing to do with any of that.I suppose as an investor who is interested in playing the Subject To game, knowing and fully comprehending the limitation statute could be beneficial and you could end up winning properties from time to time.

At one time, my partner and I were toying with the idea of taking 1/2 of our winnings from Bay Area real estate and investing out of state.

Most Realtors I know that invest love working with other investors and helping them find good deals because it usually means repeat business as their Realtor, a learning experience as they deal with different types of investors and deals, and its a great way for them to meet potential partners for future investment deals.It can really be a win win situation if both parties have the right mindset and no one gets greedy.