@Jo-Ann Lapin do you know if there are any auctions (tax or foreclosure) that still take place in person or are they all conducted online now?

If you do close on this place with the tenants still in, make sure to conduct a background check and follow all the rules you would for screening new tenants. 

CD is really your only option if you can get good terms.At this time I would focus on price, if you think he is over valued you may have to conduct an appraisal to get him to believe it. 

Pay particular attention to how they screen potential tenants, do they run a credit report, do they conduct a criminal record search, do they conduct a civil records search, do they verify employment, etc.? 

AIRBNB activity is generally not considered passive activity anyway (no matter how you conduct it).Placing your house in a LLC does not good to you since you are renting out your personal residence. 

You may get a few dead leads and unqualified people but how many can depend on a variety of things (location, rent amount, listing description, etc.).To effectively screen prospective tenants, you can/should ask for W-2 forms, recent pay stubs, employment verification, landlord referral letters, and conduct a background check on them as well.

I'll be looking to rent out my SFR within the next few months after all rehab work is completed and wondering if anybody has any Property Management contacts that they've actually conducted business with here in Tracy, CA. 

In some states, the Sheriff manages, conducts and holds foreclosure sales.

I actually plan on getting a few homes in Norfolk to rent out just as a way to diversity my portfolio; however, I like how passive investing in notes can be, pending that proper due diligence is conducted before purchasing the note itself.

If I try to walk into a bank with how you conduct business they show me the door.