Just like on the West coast pre foreclosures are highly regulated but folks violate those laws all the time..

Make sure the zoning, local building department/regulations, and neighborhood allow you to put a tiny house on your property and rent it out.If that is not possible, using that money for the next property makes sense.In general, I think increasing housing density will help provide more badly needed housing affordably.To Your Success!

I exited the market due to the short term rental regulations - properties that are rented under 90 days are considered short term.

In the last 18 months various states have instituted new rules, regulations or laws related to (1) need for licensure to wholesale (2) restrictions on marketing of a property in which you do not have ownership and (3) disclosure requirements when dealing with a homeowner that makes it clear to the homeowner that the contact signed with the wholesaler is not a definitive “sales” contract, therefore making it less likely home owners will sign4.

Regulations in Nashville allow owner occupied STRs if you are truly an owner occupant.

Hey @Anthony Zotto, this question tends to lend itself to be state, city, regulations specific as the rights of tenants/property owners vary, which you probably know.

Is it tied to changes in the market, a response to new regulations, or part of a long-term plan?

That would bypass many city/state regulations that force landlords to rent to people here illegally. 

In NY, NJ, CT, PA, MA the security deposit is regulated, as well as how much you can collect at lease signing. 

The fact that they knew about this and didn't tell you up front says to me they were hoping you didn't actually run reports. 2) Be sure to know the regulations in your jurisdiction.