It  doesn't matter if you lose your hammer etc.. you will find a way to hammer those nails in order to built that house. 

HUD contacted me, told me that I need to pay the tenants unexpected moving expenses about $1500 or I could lose my ability to rent my property.

You have to weigh your options of how much money you will lose to vacancy trying to do it for free vs advertising it on Zillow and spending money.

May just end up my niche since sadly I know most the hospitals as well as contacts and social workers who met referral needs for losing needs etc.

If yes, how would you organize the sale and development of a new property and give up losing money to taxes?

There are some buildings that you can lose money on if you get them for free, even if you get half of the renovation paid for. 

If the investor had to sell right away for $240k, with closing costs and commissions, they would most likely lose money.The other key point is without any improvements, the new appraisal will be $205k, the price you sold it to an investor for, not the $240 comps in the area.Wholesaling works best if you can find an off market fixer and the rehab the investor puts in forces a significant improvement in value.

For the past 2-1/2 weeks (took a week to realize and decide that I don't have much to lose except for a little bit of time, a little bit of gas, and a little bit of wear and tear on my vehicle) I've been doing Driving For Dollars to find these properties.

These clauses are there to protect the builder and the trades from losing money.

Though I believe I will lose money on this house, I want to begin finishing this house so I can sell it to use towards better investment properties.