We were able to refinance with our go to bank at a decent rate in this environment which allowed us to pull out our initial investment and renovation cost.

How have they dealt with problem tenants and what seems to be a challenging legal environment for a landlord?

This question is most likely best for a lawyer familiar with local regulations and code.

Quote from @Andrew Steffens: Usually there is not a way to "get around regulations". 

However, if you wrote mostly 4s and 5s, you may want to consider your options.A Final Note About Selling and ExchangingIn our new regulatory environment, a rental-housing owner in Oregon can run afoul of the rules even when trying to sell.

many houses in the midwest, for example, are very old and need major rehabs.i personally think out of state investing is more difficult than advertised, and much more difficult in the current investing environment, with: prices high; interest rates high; tremendous demand for inventory, by both investors and retail buyers; and good PMs, contractors, etc. booked up.here's a really thoughtful thread with the experience of another CA investor and lots of different responses:https://www.biggerpockets.com/forums/12/topics/1215726-break...and here are some threads about how it can very easily go wrong:https://www.biggerpockets.com/forums/48/topics/1159104-overl...https://www.biggerpockets.com/forums/963/topics/1195280-expe...https://www.biggerpockets.com/forums/48/topics/1160450-run-i...https://www.biggerpockets.com/forums/48/topics/1137397-balti...finally, you also said you "don't have a lot of money to start with." 

But I am open to ideas.I see this environment as quite challenging to find a deal that will cash flow reasonably well in my area due to HCOL and interest rates (even as somebody with some resources). 

Even if the Fed lowers rates by a full 100 bps over the next 12 months, to 4.25%, the 10-year, in a normalized environment, should be at 5.5% (+125bps over the FFR).

I know there are some STR regulations, but it seems there are plenty of parts of town where it can be done.

I am currently researching the different regulations in Ontario and GTA.