You can allocate those proceeds any way you want - as equal down payments or buy one for cash and others with loans - It doesn't matter a bit as long as you use all of the cash and purchase at least as much as you sell. 

And addressing my item #1 comment, almost always, when a "distressed" homeowner is approached, they initially are grateful to have the loan brought current, but before long they forget the circumstances they were in and you become the bad guy that stole their house.

If it is with HUD, did they foreclose or is HUD servicing the loan? 

Please, no solicitations.Use the renovation/acquisition loan products that require 10% down on the purchase and you should be able to get a few going at a time.

In the program, it appears that you offer a Pre-Loan Application-- perhaps this is how the program is legal?

I've also used traditional loans through regional banks and a few SBA loans. 

I can only imagine that they got a bunch of big time investors and business loans to grow this out.

You could get a loan from a local bank or private lender to fund it

Hello all,
I'm looking to buy my first multi-family. I have a large lump sum saved in an investment account for down-payment and any additional costs. I currently have no debt and make under $100k a year. Because of ...

I ran my own custom proforma for a bank loan using the asking price that would generate a cap rate over 10% and CoC just under 20%.