In that case you should get an attorney involved as encroachment would be a material issue that if known should have been disclosed both to the broker and to any potential buyer.  

Should I rather go look for other cash flow positive alternatives at this time?

You could argue that your property has not materially improved and does not meet the same value as the most recently sold properties.

How are they sourcing materials?  

I would need to know more specs on the house but with material shortages It's difficult to say how much to budget. 80K-120K for full gut perhaps but unsure with lumber beings so expensive and shortages.I would plan 9 months of vacancy between the pain you will endure pulling permits & having your contractors show up everyday to complete the work & then final inspections to get a CO. 

While it’s not uncommon for full-service managers, you might find lower rates (~10-15%) or alternative solutions like co-hosting services, especially if you handle bookings, rate adjustments, or guest communication yourself.

Most are flimsy, thrown-together with uber cheap materials. 

Here are a few alternatives to consider for your next property:One option is debt-service coverage ratio (DSCR) loans, which are specifically geared towards real estate investors.

RADD brings imo highly reputable folks to talk alternative investments that helps to possibly validate their business model, too.

Keep in mind his financial numbers are only material when offering an investment.