Another option is an actual commercial loan.

You'll have to research your respective state to see if you can go through the Affidavit of Heirship process or if Probate/Surrogate court is the only option.  

@Quiche LynnIf a home is in foreclosure the options are to work something out with the lender, pay them the amount that is past due or file bankruptcyHow they get the money to pay the lender what is owed can be from any source, but unless that lender is brought current or has some type of arrangement they typically do not stop foreclosure

The wonderful thing about owning an investment property are the options/strategies to consider in a situation like yours.

But with many deals facing the stress these days for deals where investor loses their original capital what are the implications or options and the tax treatment of that, and how would it be different than just a simple depreciation which is limited by passive losses? 

Does anyone  have advice/tips for lending  options  . 

Actually, having a an optional car to rent might be a great idea!

If you have experience investing in this area of the country and can shed some light and insight into taxes, insurance, Airbnb options (easy/hard/impossible), permits, flooding, other potential issues, etc., I'd be most grateful!

Out of state investing is a great option especially if your state isn't as investor friendly. 

Airbnb because it's for furnished rentals and Zillow because I've found people looking for unfurnished often convert quite fast when given a long-term furnished option.