Here is the link to the listing on auction.com 26 Delwood Ave, Middletown, CT, 06457, USA (auction.com)I spent time researching this property over the Weekend and identified the following issues1) The current occupants have filed for bankruptcy which makes eviction virtually impossible.2) The property is on the Town's Blight list and will require a near immediate cleanup after transfer of title as the fines continue to grow3) The roof has a major leak and none of the mechanicals in the house are in working order.4) The occupants have indicated they have no where to go and will be destructive if forced to leave.Why would anyone bid$155K on this property? 

Think of it like a mechanic in a way...they can all change your oil but some will treat you different, or get it done faster, and most will be around the same rate on a loan like this. 

the remainder is avoided by doing a 1031 on the rest.It's a little confusing because the mechanism starts with a 1031 and you take $250/500K of boot from the 1031. 

New plumbing, electrical, and mechanical work.

Depending on the circumstances, you might be able to take advantage of the mechanisms outlined in the Home Improvement Consumer Protection Act ("HICPA") and the Unfair Trade Practices and Consumer Protect Law ("UTPCPL"). 

I would invest money into updating the infrastructure (plumbing, electrical, mechanicals). 

I started looking for a SFR and changed my mind to a Multi after researching the mechanics of a 203K.

If the seller can find the buyer and both agree on the price and neither side is scamming the other and the title isn't encumbered by nasty mechanics liens and the mortgage company isn't being a pain in the you know what on the buyer's side and there are no zoning issues and there's no radon gas and the seller hasn't been cooking meth in the basement and there is no mold and there aren't any non-permitted modifications to the house that can come around and bite the buyer, and both know how to draw up, read, and understand the contract, no need for an agent at all.

One approach might be to place a mechanic lien on the house in which the laborers would be paid after closing.

We are working on a good size hotel project in San Diego (La Mesa, CA) and are looking for small-mid size mechanical, electrical, and plumbing subs.