This is all before title, tax, conveyance fee's, water hold, etc.

Looking to invest in states like Texas, Florida, Tennessee or any Landlord/Tax friendly states.Any suggestions would be very much appreciated.

An additional benefit of a detailed engineering-based Cost Segregation Study is that it can increase potential insurance premium savings as well as provide support for the property tax appeals process.

@Christopher SarmientoHow was the 50k estimated tax calculated?  

It may be beneficial to consult with a real estate professional or financial advisor to help weigh the pros and cons of each option and make an informed decision.

What I have done in this situation is I acquired the property and then had the individual sign a long term renewable lease and the cost was $1/yr + the costs of insurance and taxes. 

Many tax sale properties derive from estates where the heirs take no action and the property goes to tax auction.

Is it maybe because this income hasn't been captured in a full year's taxes yet?

If you want to take it up even further, maybe consult with an attorney and sue your HOA.

There are some real estate consultants who will do this and give you a detailed report but it costs a little more ($200 in Indy).