If you buy in the proper STR areas there is practically zero regulation risk. 

In these states I assume that just like a standard foreclosure, all funds acquired during the sale that exceed the outstanding contract balance and any liens on the house go to the contract buyer (vendee?)

Purchased a note with a $3.2 million balance for $1.775 million.  

What's the house worth and what's your balance with the seller?

You will know that the remodels are done well/properly, so you can hire out the PM piece and move forward. 

We were interested in learning how to develop proper systems.

Given that the house is paid off but has $27K in back taxes, you could offer to cover those taxes upfront in exchange for favorable terms on the remaining balance—like low (or no) down payment, and small monthly payments.You could also negotiate for a subject-to deal where you take over the property subject to the taxes, while still securing control of the property for your BRRRR strategy.

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

The land is often far from urban areas where housing is needed most, and environmental concerns must be balanced.

By your own admission you don’t have the balance sheet to buy real estate or borrow and haven’t taken any projects full cycle.