My questions are:- When a property is in pre-foreclosure, would you expect the bank to redeem?  

before you go searching for higher priced HML.. check with a local credit union or COMMUNITY bank..

My spouse and I didn’t learn our lesson here and took on a second partner in a real estate/restaurant operation and ended up again having to have legal action to sever the partnership when it failed.

Whichever way you go, do your own taxes or get a CPA, make sure you have a good bookkeeping system for each rental and I'd recommend getting a business checking account - when I had my rental income and expenses mixed in with my personal account, it took a long time to sort through which was personal and business (rentals) with pages of bank statements. 

All you're doing is transfering cash from your bank account to the property. 

I would check with more local banks, as that is probably your best option.

Quote from @Jamie Banks: I'm not familiar with the market but I've operated MTRs in a few different markets.

A tenant who fails to maintain a rental property could end up costing you more in property damage and court fees than the amount of rent they're paying you upfront. 

You don't want to bring over poor operations to STR because you will also fail there.

@Jesse Dominguez-Castelan you could get in touch with a local bank in that town and explain to them exactly what you just did here and ask them if they have a product that might help you accomplish both the buyout and the renovations.