Yes, it's a risky proposition unless you have run a title search and feel very confident that you are buying the 1st lien. (Heard of many horror stories about investors buying 2nd liens when they thought they were buying 1st liens.) The improvements have inherent risks as well that you would certainly want to evaluate/mitigate prior to bidding. So, my quick response is....unless you decide to be committed to buying properties via this method, the upside is typically not worth the time, effort and money. If a property has enough equity (to make it an attractive investment), the lender will typically be the successful bidder. Many of the properties on the F/C list don't make it to auction because an agreement between lender and borrower has been made (anytime up until the trustee announces it). So, you end up doing a lot of due diligence and then the properties that are worthwhile 1) don't get announced or 2) get bought by the lender. Waste of time. If you want to pursue this line of business, attend a George Roddy Jr. seminar and tell him I said Hello.