My question is IF the winning bid was for the $4600 (assuming nobody bid against you) doesn't the winning bid, wipe out the taxes, is this correct?

Genrally a fully delegated bank with correct licensing can offer the approval. 

When you found violations, did you document them in writing, give the tenant a deadline for correction, inspect to verify compliance, and use consequences for continued violations?

I am definitely going in legal way for sure but wanted to make sure whatever I understood from online search is correct or not.So, I should go with investment rates.Is there any recommendation to get good investment rates?

@Nathan Gesner is also correct.

Definitely learned that budgeting the rehab correctly is sooooo important.

It sound like you're just taking over the payments, but correct me if I'm wrong. 

If it’s C or above, getting the new management company, doing any updates needed to be comparable to comps, and adjusting the price properly should correct this.

having an incredible onsite manager, adding colorful flowers to perk up the curb appeal, paint the windo shutters to make them pop and renovate the interiors.

They are typically the opposite of value adds in that they typically have a hands off cost more than the value added.Your broker is correct that Fannie/Freddie are not to use the rent from the ADU.