On top of that, the bank will add in back interest, legal fees, and everything else.

Hi Wayne, my best advice for probates is to work with a probate attorney to make sure all of the proper contracts and legalities are being used.

Don't let fear stop you from doing nice things for your tenants, check with legal if you are unsure about details.  

I will leave the (I)legality of it out of the discussion and just look at the overall strategy.You would need to get your agent to get an offer accepted on the property and then you would need to find a buyer willing to pay you a price that is higher then the listing agent and every other agent who is a part of that MLS could find another buyer to pay.

I bet you dollars for donuts that the other guy put the offer in through the listing agent and that agent did what he/she had to do (legal or not) in order to double end the deal. 

He did exactly that: set up a business entity, funded it, paid himself through the entity while the rehab was in progress and then the proceeds of the sale made everyone/thing "whole" in addition to the returns on the investments made by the account LLCs.It's WAY too much to try to explain here, but do seek out a highly expert tax and legal counsel to help you work through the details.I see it done over and over by the people around me.

I'm not sure about the legalities of this if they are in a NOD, so talk to an attorney.

Perhaps you may want to speak with a realtor about viewing REOS on the MLS.You can't view them (legally) prior to auction, and they are no longer owner occupied if final judgment has been obtained already.

The legal here includes complicated indenture agreements and other standard items like an offering circular, subscription agreement, etc.  

Also check with local laws to make sure you are following properly to legally wholesale.