Alot of this depends on your local and state laws.

Overbuilt MFH, the vast majority of STRs being converted to LTRs in the past year due to law changes, and rent amounts are currently outpaced with what properties are selling for. 

Here in NYS you cannot collect any deposit beyond one month's rent, but I was charging this as a fee before the laws changed here in 2019.

The best advice is consulting a cross border tax specialist who also have a good understanding of US real estate laws and taxation.  

@Kenneth Soles  I have done this too many times to count.and after all the years of dealing with folks that lost their home be it tax foreclosure ( very very rare on the west coast by the way)  or Trustee or Sherrifs sale ( most common).Rent back can work but usually turns into an eviction shortly .Sell it back is another pipe dream.. unless your willing to owner finance it.. then you have the dodd frank stuff if you want to be letter of the law compliant.

I would recommend doing the research on landlord laws in OR and documents needed and how to get that process going for future tenants and doing it the right way, it seems you may have started that.

So IRS redemption rights are at a minimum 120 days, but they follow state law as to minimum redemption period so in AL you would have six months to possibly two years on IRS redemption.

When purchasing your mother-in-law's house through seller financing, since the property qualifies as her primary residence, she should be able to exclude up to $250,000 of gains ($500,000 if married) from taxable income, so capital gains taxes are unlikely to be an issue given the sale price is below the tax basis.2.

Here’s how I would approach your situation:If you’re in the early stages of buying, you'll likely need to take the vacant unit due to existing lease agreements and oregon laws.

I currently have two STRs — one is out of state in Florida, but the other I run out of my primary residence out of a mother-in-law suite my partner and I rehabbed in our walk-out basement.