The biggest issue I see is that they are looking to restrict STRs in the area so why would I buy there knowing it could all go away.

We ran into the same issue when we made our Costa Rica investments and didn't really find a good solution for a local mortgage there. 

Hi, pre foreclosure in all of its permutations, before the bank sends Notice of Default (NOD) or efter which is state even county dependant but often starts a 4 week clock till the trustee auction are the 2nd most difficult deal scenario and IMHO only experienced investors should bother, the 1st most difficult deal scenario are bidding at the court house steps on lord only knows what is being auctioned off sometimes even 2nd mortgages, you need to do so much home work to attempt to reduce your risk at the court house steps...Pre foreclosure no one talks about these issues, always about the nice sounding stuff like "motivated seller" get a good deal etc etc both are usually not the case.- 95% of folks in pre or post NOD want to stay in their house, keep their house inspite of them 100% will loose the house at the auction. 

Do you want to be solving tenant issues, buying properties, problems at work, etc. 

The ones who bought 3/4 units in good area $500k+ buildings did great, these ran with no issues, rents increased/appreciated.

As such, getting a Section 8 tenant and subsequent delays has not been an issue. 

If you discovered the issue before paying for the appraisal that could hopefully save some costs (in case the appraiser is with the wrong AMC).Pre-vetting with the lender on rental history/AIRbnb/1007 as well as seasoning could help. 

And it was also during covid lockdowns so that added to my issues.

Same issue, website address doesn't work 

However, this is a conservative regional bank, that is on the NASDAQ, so maybe that’s the issue?