However, have you ever gone downtown to the steps near the capital and witnessed a Trustee sale? 

You are free to do whatever you want after. 

Net operating income after renovation divided by (purchase price plus cost to renovate) equals cap rate - let’s call it yield on cost. 

I have been investing in the stock market for 5 years and I am now transitioning over to real estate after doing my research on real estate for the past two years. 

After talking to my accountant we feel confident we meet the requirements.

Since both lots had the same mailing address, this was the address used by the foreclosure attorney when posting the sale.  

Seems to me my options are...SELL - If I were to put it on the market I think I could reasonably get $2.8M - $3M, but at a 2.9M sale price my return on my initial investment is only 38%, or 7.6% a year over the 5 years.

It's awesome that you're leaping into real estate investing after all the knowledge you've gained from Rich Dad and Bigger Pockets.

Generally, he lands a lead worth going after every month. 

I would send them notice today that explains what will happen after the current one-year term ends.