They both have existing mortgages + delinquent taxes - I am wanting to see all options (wholesale, subject to, etc) I can exercise to retrieve the homes and also get more clarity on this question -Why would I purchase their home (after covering the mortgage) + tax liens when I have a possibility to win it at auction for a possible fraction of the price?

definitely on the hunt for some good deals, connections and win win win situations.

If you can get a place that by renting rooms/or Airbnb’s can eliminate your lodging costs in Houston and pay the mortgage I would think that would be a win. 

Promise a WIN & they rush in. 

I recommend you find a realtor who works primarily with investors (buyers do not pay commissions so it will cost you nothing) to come up with a more targeted and winning strategy. 

Also, reno has been postponed and placed on standstill for a month.Is there a way I can craft up a deal where I can buy the house from my brother in law and create a win win situation?!

They are excellent, you can buy them on this site, and you can support the place you come for this kind of advice..Win, win..win..

If he sells the home to me, the bank can not collect from me because I am now a bona Fide purchaser, and the argument is that I bought the home based on an official court ruling, so even if the bank wins the appeal, I should still be in the clear because I bought a home on the assumption the first official court ruling.

I have had my winning bid accepted even after the site said reserve not met.

Househacking for the win.