They are investors who focus on finding and securing properties at a discounted price, often distressed or undervalued properties.

That street is definitely in a transition phase and given the current market conditions in my opinion you would have to discount units in that building to a point where it wouldn't make sense as a STR.

I have a 5 bedroom / 2 bathroom single family brick rancher.

I wish we had $100k discounts haha

We removed 4 walks (including load baring), installed 2 walls, added half bath, replaced all plumbing and electrical, added new eye brow porch, painted full exterior (changed color), replaced all flooring, new bathroom and kitchen layout with everything replaced (shower, cabinets/vanity, counter, appliances, etc), stocked with new furniture, added mini split, removed gas/wood fireplace and added a new electrical fireplace, and placed initial STR tenant in 2 months and 1 week.  

They instead focus on fully gutting their projects and install entirely new kitchens, bathrooms, fireplaces, accent walls, etc. and any exterior or mechanical upgrades necessary.While I understand this whole hog strategy, part of me says this will end up increasing the value of a home so far beyond other homes in the surrounding area that it wouldn't sell for what it's likely worth.

Also,  you will save a lot of money on discounts on rehab materials, vendors, contractors, title company numbers, etc. from their "mastery member" discounts . 

Would you: A) Sell the lots now at a discount, take a loss but at least get some money back out to try and redeploy elsewhere. 

The best drywall job I got was when I had the entire first floor (9 foot walls and the ceiling too) -- living room, kitchen, bedroom, bathroom, the back hallway, and the upstairs bathroom all drywalled AND textured for $2,000.

Keep in mind that about 40% of the population rents.I agree with you that buying a run-down property requires experience, the biggest concern is that you don't get enough discount for the condition.