For those participating in Arizona trustee auctions here is an interesting article:https://www.asreb.com/2018/04/laying-law-supreme-court-rules-claims-wrongful-foreclosure-must-filed-prior-trustee-sale/

Either way it’s a small niche.I’d also caution you on you’re maintenance costs. 5 bedroom probably means more bathrooms, a physically larger house with more plumbing, roof tiles, larger hot water heater etc.

Also in those older home you should really be careful on how you lay it out.

The living room & kitchen floors are using white tiles and the room floors are vinyl.

Im not a seasoned expert, but not new either - my take is that you should lay out more info of what you are planning to do with the property and exactly how much lower it is than the surrounding area. 

Depending on the quality of the property, location, and tenant history I would consider upgrading to ceramic tile.

Can we just do a move-out agreement that lays out what we are doing differently? 

Expect some negative cash flow at first, but once you get your own tenants in there you'll be in much better shape.I would also lay down the rules and expectations on the existing tenants from jump, and when their current leases expire, have them sign a lease of your own, with these rules and expectations reiterated.Good luck!

Tile, granite, vinyl plank flooring, etc.No particleboard cabinets.  

My dad and I did all of the framing, windows, hardwood flooring, tile, cabinets, and trim work.