With the change in management from the previous owner, we expected a bunch of maintenance requests would come in the first few months and then slow down over the rest of the year and that's exactly what happened.

I wouldn't ever recommend buying a property purely for expected appreciation.

I’m expecting it to come in about 40-50k short to finish.

Don't really see why I would need an attorney unless a dispute arises, than expect I could hire one?             

If the area didn’t appreciate in the way that we expected, we could rent the home for $575mo, with hardly any renovations.

What can I expect at the time of the auction?

Mind you, why on earth would the Seller let you rent it off him (with option) for less than you expect to get by renting it out without option?

After mortgage and expenses I calculated for worse case scenario (575-(mortgage=300)-(expected expenses= 80)=195x12= $2340/year. 2nd house rented for $650 brings $7800.

Do not expect them to be perfect tenants.Moving forward as a investor you always prepare for a eviction.

I would expect to pay (and have paid) about $4000-5000 for replacing sewer line from the house to the main line.