Think of it as s long term investment that will save you headaches down the road. 

I also require additional security deposit and sometimes a guarantor if they were approved in this manner.I also agree that this situation sounds like a pattern not a one-time mistake or short term tough situation that caused this.  

At the end of the day its about price and terms. 

Personally, I advocate for a long-term investment strategy and would recommend investing the funds, provided you are comfortable with the expected return on investment over time.

Quote from @Nathan Gesner: There were a couple experienced investors on the forums that loved to tell everyone they could manage a short-term rental in just five minutes a week. 

While short-term rentals in areas like Kissimmee, Florida, can pay for themselves and offer lifestyle benefits, the ROI typically doesn’t match what I see from my traditional portfolio of long-term rentals in North Texas.That said, short-term rentals can still be a great choice, especially if you're drawn to the area and the opportunity to combine personal use with investment income.

What are the terms of the auction?

As I see it, the only ways that real estate pays you well in the first 3-5 years is low to no leverage or a strategy that requires more work (short term rental, mid term rental, rent by the room, etc.).  

"We do not expect much further upside for housing demand near-term.""

It seemed like a long-term play with less price or industry volatility.