Fannie/Freddie money = Fannie/Freddie rules.

I currently have tenants but during this year I would like to start making small improvements and gearing up for the sale.

I wish you all the best as you improve your primary home to build equity and work towards your first investment property. 

I understand that I can deduct repairs and maintenance, though not improvements.  

The 50% rule is a federal flood rule that originates in the Code of Federal Regulations and is administered by local governments.

Not a red flag, usually this means the owner didn't have the property for very long, or are just lazy.I would try to squeeze the agent to ask if the seller can provide a list of improvements made on the property over their ownership if any.

When you borrow from a lender the loan doesn’t fall under the SEC offering to investors rule.  

And if the rules got so strict we could not STR it, we'd need to love it enough to have it as a second home and in that case be in it for maybe 2-4 months of the year.

Catch 22 for sure.Not necessarily looking to do heavy rehab, but am open to improving the property after purchase if the right property comes my way.

Which makes it a lot easier and I also use cash for all my purchases to negotiate and improve transaction speed.