Bidding starts at $60k (I'm sure there's a reserve price) as the house is in a great newly-built area and worth nearly $250K.My attorney stated what @Ned Carey also said:  Can't use hard money to purchase an online auction home that lists "cash only" as my HML would NOT be considered cash and is considered a "financing contingency."

Just make it contingent upon it getting done before the tax sale process goes to far.

However, investors do not get an inspection contingency, so there is a level of risk.  

The fact that I'm pricing aggressively and my listings are still flying off the market in short time, with multiple offers for way over asking, with removed contingencies, and closing no problems tells me my timing is not too far off ... the only thing missing is a complete relaxation lending standards; they are loosening a bit but still exist; if they go away like they did in 2005 then things will shoot up like a rocket and then look out below!

What are the contingencies on the loan?

Do this after the appraisal is back and your removing all contingencies. 

. - If you have enough meat on the bone as you're claiming, you could increase your budget to include the downpayment as a "contingency" or "GC" line item.

You want to have contingency clauses in your offer. 

We were not counting on any of these unforseen items, but we did have a contingency amount set aside in the budget for unknown issues.We called in a contractor to get an actual quote on the now known things and turned out it could be resolved within our pre-established budget.Had this amount been over our pre-established budget, it would have put us in a position to renegotiate.Here are my thoughts that was running through my head at the time.Option 1 - Continue with the deal if within budget.Option 2 - Ask Seller to lower price due to unforseen items that came up on the inspection.  

Part of the risk of bidding on these auction sites is that you typically have no financing or inspection contingencies.