Can someone tell me if this is correct: if the owner redeems they have to pay the full bid price, fees and court costs, 10% interest, and any “necessary” repairs (what constitutes that)?

If they're not serious, they won't pay.

I would talk to your tax person make sure you do this right for both people on this transaction .

I sold it at a great profit a couple years later, when I decided to move away.People are often afraid of the unknown regarding having to put in a well, especially, and are happy to pay a premium for a place that already has one in place.So, I guess it's more of a land "flip."

At what point does accepting capital, using the capital in private lending, and paying interest on the capital become a security?

You can still operate it within the LLC and get rental income on your personal tax return in a few ways. 

Far too man investors get into STR based on gross income numbers, not net income after paying all expenses.

Get good tenants that won’t likely cause issue (background check, credit check, references, pay stubs).

generally some sort of financial issue that makes a lender say they will not pay so why do you want to take a risk the bank will not take on?

When analyzing the deal, focus on cash flow, property conditions, and appreciation potential, ensuring the rental income covers financing costs.Don't forget to layer in tax savings from RE in your cash flow and ROI.