Look at their marketing strategy.

I also help other investors get started there with my team.It's a great market but you really need to understand the landscape and risks.

In this market that's hard to find cash flow, I'd offer to look into a live-in-flip to get your feet wet & a solid understanding of rehab costs. 

Obviously, the burbs out past 465 can be good appreciation markets. 

However, Matthew reminded me of my long-term investment objective and assured me that the property would appreciate, given the strong real estate market in Alabama.

If you want to network or ask specific questions about your local market, go to your local real estate forum and connect with investors from your area: https://www.biggerpockets.com/forums/86-local-real-estate-networking5.

Then 4) I would get laser focused on 1 or 2 good markets with a realtor that is also experienced with flipping and can help you find good deals. 

Market the unit as having a kitchen + wet bar (eg, selling the not-a-kitchen in the not-a-unit as a feature) and being some sort of "luxury penthouse apartment" or something.

Was it marketed to you as POS compliant on the listing, or understood that the seller was clearing the POS? 

What are the closest markets where it is still legal?