So i feel like I'm getting a deal but on realtor.com & Zillow it says the home is worth 171k. 

I have lived in this area and owned in the Bay View neighborhood also and I think the right product in this location could produce similar rents as the 'hipster' Bay View location.

Then you can use the money as a down payment on a property; factor 20% for a SFR and 25% down for a multi family (duplex and more)I had $50k in a SDIRA, but found that the hassles of working with lenders in an account like that just wasn't worth it; I rolled it into my current 401k and took a loan against it.But with the amounts you're talking about, you might just be better off taking the hit now but freeing up the capital to work unencumbered with the limitations found in a SDIRA.Just a thought.

I have an appointment with my real estate agent to view the property on Wednesday August 17th at 12:30pm.

This despite it being worth less still than they paid.

Hi there,I am new to wholesaling and currently I am building a database and network of clients and people with likeminded views of wholesaling real estate in the Rochester NY area. 

REO properties have there liens wiped out by the bank before they are put on the market, that is one of the advantages of buying REO properties. i just purchased one for the first time, but i did have my attorney in that state do a title check before buying it to make sure, there were a lot on this property but were all wiped clean before it was listed, in this case i just paid that fee at closing, otherwise i would have paid for if i did not buy, but felt it was worth looking into before buying the house.

You and your wife should both already have substantial incomes, yet your net worth is completely upside down because you're not in control of your spending.You and your wife are not willing to house hack.  

@Jay Hinrichs The property is pretty steeply discounted, and is worth 430k in its current condition.

Show them what you know and what you're worth and they'd be foolish to not let you help them!