This is something I would have to dig into your background on to properly advise on which asset class might be better for you and also how much management intensity you desire and/or can handle.3.)

Should I attempt Sub-2 or contact the bank and try and work out agreement before foreclosure?

I am sure it will all work out for you in the long run.. we sold ours and made a tiny profit on each but its better than a loss right ?

STR even more than LTR are management intensive and the host can make or break the ROI. 

It may work out that I have to start smaller than I want but having a big goal and only getting 80% there is still better than having a small goal and hitting it 100%. 

I appreciate how @Scott Trench is publicly giving his research, opinion, and what he’s investing in, but has the humility to admit it may or may not work out.

Real estate is a very capital intensive industry and if you do not have the money the odds of success are very low - it is no different than starting any other business - how many people do you know are successful when they start with zero?

How much of this do you feel you need to supervise, and how much can you say "be respectful" and have them work out? 

Which in itself gives me major pause, because these rescue capital loans almost never work out.2.

But if it doesn't work out as you hope, then you take some lost.