The buyer of course believing he had purchased the house paid a visit to the tenant, who of course called me.  

@Kyle Shipleycan you house hack?

Hopefully you already worked this out.Aside from HML, there's also an option to do a live-in-flip, where you live in the house for a year and renovate it slowly.

We would take this house in return for a 500k property that is NNN leased.  

And addressing my item #1 comment, almost always, when a "distressed" homeowner is approached, they initially are grateful to have the loan brought current, but before long they forget the circumstances they were in and you become the bad guy that stole their house.

Keeping my eye on the worst houses in the best neighbors that need some reno that I can turn into STRs or LTRs.

Run the house hacking numbers.

I recently came across a property through an agent with attractive numbers for a house flip.

Buying a large new build home can also work well as a house hack as you can charge a premium rent, and generally most bedrooms built now a days have en suites (at least in my market).  

The rental market is expected to stay flat or soft through 2025, then is estimated to start appreciating again once the new supply of multifamily housing reaches traditional occupancy levels.