What are the thoughts and suggestions on rehabing a property and then converting it into STR to maximize the tax losses?  

I'm always looking for ways to maximize a parcel instead of just flipping it.  

That being said we have the cash to pay for it outright but have been trying to learn the lending game for off market deals and to also maximize our cash on cash return. 

Great point @Twana Rasoul Often times the entire funds are needed to maximize your next investment.

So, if you bought a turnkey 5 unit property you expect that the condition is maximized and the rental income on the apartments is maximized, BUT there could be an opportunity to reduce expenses or add additional income sources.

Once fees and improvements are taken off too we should be maximizing that.

I'd start with focusing on getting a top net, hopefully you are working with a good agent, hopefully they worked it out with you that in your current market this is a good time to list your property and maximize its potential(?) 

Could anyone provide recommendations on specific locations or strategies to maximize my chances of success in this venture?

Given your interest in wealth building through real estate, have you considered exploring out-of-state investments to potentially leverage market conditions and maximize returns?

Any suggestions on a better way to maximize cash flow in that area?