We have the down payment and access to cash for the renovation - but getting a conventional mortgage would be tricky because we had to walk away from a mortgage in 2008 (surprise, surprise) and it took the bank until 2013 to finalize the paperwork - hence, our waiting period is until 2020.But the deal is NOW! 

If you do FHA or similar, you'll have to live there for at least a year.Most banks require at least a 6-month seasoning period before they'll refi based on a new appraisal.4% interest rate for the refi seems optimistic for an investment property.

For one, you have a limited time period to find a new property, which could leave you in a vulnerable position from a negotiation standpoint.

Overall we agreed to pay off their back taxes and let them stay in the property for an unspecified period of time (we estimate 2-3 years at least) for $450 /month and they cover all repairs and improvements to the property along with their own utilities.

Is that for the period that I have the home or the age of the home? 

You can offer a new tenancy at YOUR terms - your rent rate AND that it will no longer include parking (or only one spot or whatever the situation is) If that is unaccceptable to them then there is no new tenancy and they need to be out at the end of the notice period.

Connecticut has a 6 month redemption period for tax deed purchases.The Connecticut statute specifically provides for an insurable interest in favor of the tax deed purchaser to protect against fire and physical loss to the property during the redemption period.

Is there something that protects the buyer in this period between the purchase agreement and the closing date?

I was actually working with @Brit Foshee and he advised that the wholesaler wouldn't even give us a 3 day inspection period.  

Did you have an inspection done during your due diligence period?