In your situation, it sounds like the primary focus for you is more a quality of life play (reducing your commute time), and the STR may allow you to break even cash flow wise? 

I'm trying to wrap my head around working with investment capital long term, and there's also the potential for some seller financing from the building owners, and my cousin is on the board of a bank which could also come into play.

$2,000 rent for a 3x2 1500 SF house is pretty fair$2,000 at a 30% expense ratio which is way too low is$1,400 NOI per month$16,800 NOI per yeara 7% cap rate is $240,000$240,000 at a 6% interest rate and 30-year amortization is $1,428.92 per month or a 0.97 DSCRTo get to a 1.25 DSCR at these numbers you could only borrow $187,000 at a 6% interest rate with a 30-year amortization. 

Well to be fair, when I was starting I did a lot of 'unconventional' things to be able to buy and build/grow.  

A fair price reduction would be based on the original price per lot ($12,000 x 5) or $60,000.

It is not much larger than my tankless, but my tankless is fairly large compared to many.  

It is time for us to modernize our practices.We are a fairly basic operator/developer with a few 3-4 unit buildings.

I've tried many different strategies, and all have turned out average...economy of scale and systems & processes play a key role in long-term success.

You don't get to pick them.The math should be fairly elementary. 

The vast majority of lawsuits against Landlords are for wrongful eviction, security deposit disputes, and Fair Housing Violations.