Then things went south...I decided to gut the rest of the basement since it got water damaged from the foundation issue.

In 2020, the ground leveled out, then quickly shifted to hilly terrain.

If the lender originally did not believe they needed an appraisal, then most likely, something changed due to underwriting and an appraisal became necessary. 

If you are thinking of renting, then that wouldn't make sense.

If they fail to pay the taxes, plus fees and interest, within that time, then the property legally becomes yours.

It's possible that your tenants are using something like that and then bringing the stuff down to dry it.

If you're willing and able, I do recommend the "house hacking" strategy which is just a fancy name for buying a rental property and living in one of the units, because you'll get very favorable financing - an owner-occupied fixed-rate 30-year mortgage.I'd also say, analyze that property as if you won't live there and it's a pure rental, and make sure the property is still cash flow positive if there's a tenant in your unit because then you'll know if it's actually a good investment.And when you analyze it, include payment of a property manager in your #s because if you don't, and doing so would make it go cash flow negative, then you've just bought yourself a job because you literally can't step away from managing it without losing money.

Adding mass to the walls works wonders—attach Mass Loaded Vinyl (MLV) to the shared wall, then cover it with a layer of 5/8” drywall using Green Glue soundproofing compound for extra noise-blocking power.

Then it sounds like you have your mind made up then right?

Then once you've fixed the property up and at least have it listed for rent you could refinance into a DSCR loan.