Seeing that they have auctions for properties and the estimated starting bid.

This would inform the tenant they’re in violation of the lease and must correct the violation or leave.

I don't think it is correct to presume that taxpayers pay more if someone creates a new Section 8 property. 

Many of the over the counter (leftover liens) are also junk, there is a reason no one else bid on them in the regular auction.

You line up a HML - so the next time you find a "deal" you use the hard money to buy the place, fix it up, and if the numbers are all correct and you are still under 80%LTV then you refinance into a conventional loan and payoff the hard money and construction loans.Keep doing wholesale deals, since this will give you some credibility with the hard money lenders, and you will need some of your own cash for the down payment and construction costs. 

Are you thinking of developers offering bids to condo owners

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Does that not sound correct?

If you can offer more money than they can reasonably get from an auction AND do so in a way that absolves them from showing favoritism, then you may be able to pull it offas a banker myself as far as I know selling assets through a non-bid process is a NO-NO. but I can't speak for all banks.

@Jay Hinrichs That is correct Jay.