Auction properties typically require quite a bit more research and don't come with as many exit strategies as those found on the MLS.I would recommend attending your local auction with no intention on purchasing, observe the actions of the bidders and maybe befriend a regular, if possible.Good luck!

As I am starting with a clean slate, how would you all attack my situation if you were in my shoes? 

You can only allocate a couple % for this - the other regularly recurring expenses like roto rooting, regular tree trimming, asphalt sealing, etc can all be allocated as part of your diligence and be pretty firm year over year.

This step ensures that the title work has been done and both the borrower and you have clean title.6) Recording of the deed.If the funds are being loaned for construction, I would lend the money in draws, upon completion of phases.

See who's representing the owners and tenants, and who seems to be well known as a regular attorney in the court.

One of my wife's uncles was in charge of one of the properties which is zoned for commercial/residential, it is a 1708 Sqf office space/small warehouse on .36 acre lot.Which with some research it can be split into 2 lots.He let the property go to the dump, needs a new metal roof, and gutted, replace plumbing/bathroom, replace electrical etc...Now my wife’s Aunt is in charge of the estate and she was the one who approached me.She said they will "sell" me the property for $30K (estimates from Real estate agent say property is worth $43-$53K in current condition) Which then I could clean the property up and try to resell with the improvements.Now if I did replace the roof make the inside look nice and clean the overgrown landscaping I was told (real estate agent) it could get about $60K, but there are back taxes and liens on the property as well.Plus closing cost for when I sell it, I have run the numbers and it seems that I would MAYBE make $3000-$9000 conservatively.But I am real concerned over the fact that it is used as an office/commercial, and wouldn't this limit buyers?

From what I have heard and it makes sense if you invest in an area that is being cleaned up people will move there for cheap housing, hipster types will build businesses and it will be good as long as you stay in that area and have some plan for keeping crime out.

Ive been focusing my search primarily in Sacramento county and also look regularly in Solano, San leandro, and Santa clara counties.  

Save some cash right there as long as the title comes back clean.

In Real Estate as in any industry that involves sales you are going to get teasers, people making it seem impossibly good like offering an 8 unit apartment building for $39,000.00 Who would not love to buy at that price but when you call they tell you , " Oh that was a typo and the building is really 1,039,000.00.I have found wholesalers much like most regular real estate agents do not provide accurate ARV, repair figures or potential gains figures, they also will put in a disclaimer that there is not guarantee of accuracy and buyer is responsible to do their own diligence.