What characteristics and criteria should I be looing for in a lender?

The truth is, individual storage assets are pretty well buffered against the "market/sector" unless they are in a micro-market that mirrors the unfavorable characteristics that you mention above. 

I assume that the relatively high tax number is because of the jurisdiction you are in rather than because of some special characteristic of the property.   

Just adding property characteristics of SFR 3/2 brought that number down to 677 from over 13k

Keep in mind, this wasn't an overnight thing, to get such high conversation rates.It was about 10 years of historical data analysis, before we figured out characteristics on how these assets perform over time, before we were able to dial in our model.But after that, we just run our proprietary algorithm on the entire tax sale pool each year, and compare the profile of the new pool, to prior years pool profiles.And from that, it results in two pools of tax certs that we invest in, which don't overlap.One group of tax certs that we only buy for high interest yield, and the other is only for us to take ownership of the property.And because we have this targeted approach to purchasing, is how we get the numbers we get.

The seller has bought the property as an illegal duplex as well 40+ years ago.The change in property characteristics has been submitted to the County by the seller but is still pending (answer to be expected by 2021 because of Covid backlog).We are buying jointly as a family and would occupy both units.

The most natural thing to do would be to put together a comp sheet on competing opportunities in the area, but the number of competing opportunities is small and highly variable both in terms of characteristics and cap rate (an inn/bar/restaurant with some residential units attached, a mobile home park, a couple run-down 4 unit multi-families, etc.).

Whether that is in your lease or not, you can post notice and demand the tenant clean it up. it is an unsafe hazard to other residents and rescue personnel, it is unsightly, and The wrong items could attract pests.Give them 72 hours to clean it up or you will dispose of it yourself and charge them for the cost.

Outline the characteristics important to you, and really understand what YOU are looking for.

A little background on the general Las Vegas tenant pool characteristics might be helpful.Note that the following is a generalization and may or may not apply to a specific tenant.