We went in yesterday to do a preliminary inspection, take some pictures, and change the locks (we will put in new doors later).

Preliminary research points to the possibilty that I might have to replace the floor and even the sub floor.

from preliminary screening they had a foreclosure for about 160K property that ran for 8+ years.

I will confirm utilities are back in my name tomorrow but I would wager good money they are. 

I think we both know whats right for us, though due to your experience I'd wager you know a little better.

You can reach out to Helen Caverson at Caliber Home Loans here in TC, she could run some preliminary numbers for you.

Given it's small town, I typically do preliminary online search-  Sometimes I find that the owner is actually in real estate, but in a different state where they live, and also potentially not specifically in residential real estate.Is it worth sending a note to these types of owners or better to avoid?

I've heard that Butchertown, Highlands, and Old Louisville are hotter areas and am guessing that proximity to Churchill Downs and downtown are usually a plus (especially for STRs).I'm casting a wide net here in just doing some preliminary research to get a feel for different areas of town, but would love to get connected with some others who have had some experience doing some of these things and have a good lay of the land and are connected with reputable contractors. 

However, during my preliminary search of the area, it seems as if the DC metro area may be a little too pricey to get started here.

Nothing is written in stone everything is preliminary.