If you think all of this can be worked out it will be a win-win for both of you just be very cautious in the decisions you make and good luck and be blessed.

I want a win win for everybody.

That will not be the case if you buy as a short sale.Last question, if you buy it, lease it for 5 years, you have maintenance and repairs,  not knowing what you'll have in the property, or having an insured loss, can change your ability to profit, I'd think hard before agreeing to sell under its estimated MV or simply adding to your purchase price, neither price you mentioned has anything to do with the MV, so it may well look more like a loan or sham type transaction.

One way would be to have a domestic corporation (LLC) that can have members made up of other domestic LLCs in other states, each of your friends would have their own LLC then that LLC would simply be a member of a "parent" managing entity.

They do risk actually winning the bid, though.Whether the second would accept a small payment rather than take their chances in some other way depends on their evaluation of the deal. 

It will benefit you in the end when you are the expert and not simply relying on the advice of someone else.

I have already been approved for the mortgage for the new property and would like to move into it as my primary residence.I am wondering if since there would only be approximately three months of time that I would be in violation of that clause, if I could simply not transfer my insurance policy to a landlord policy until after the year has lapsed. 

Whats the point of the bank winning the auction, taking ownership and liability, only to get the same price as the bid later on MLS. 

I am new on here and have placed a bid on a property, ( I am currently the highest bidder which I see really doesn't mean anything)  However, if I do get lucky and somehow win the bid, do they use a standard Florida Contract in which I have a certain amount of time to inspect?  

This is where you will begin the learning process and the building of relationships necessary to have someone available to partner with by simply making a phone or two.