I see that in my area, many agents buy homes either from wholesalers or at auctions. 

What are the best areas of a single family house to renovate that will have the greatest improvement to home value?

Rarely is the pursuit worthwhile unless there's insurance money available or assets that can be converted to cash.  

If you want to get a clue about places to avoid investing look at states where insurance premiums have jumped or where homes are uninsurable. 

Also, would a home warranty be a smart move?

Do the math at a 6% loan rate.There's a reason many apartment buildings have been converted to condos and sold.

I used free tools like Zillow and Redfin to come up with a home value, asked him some questions about the condition of the home, made him an offer, and he accepted it.

It’s a 3 bedroom home, brand new build and just shy of 1500 sq ft.

I toured the property when they were home and they asked me how the living situation was gonna work, which I explained that my loan said that I had to live on the property for a year, and the tenant next door was on a year lease & he was month to month... so he was going to have to leave.

Quote from @Brendan M Hornung: I reside in Southern California and started my investment journey in March of last year by purchasing a sub-to single-family home in AL.