I am presuming you have your realtor license to obtain your data points?

We decided that this would be a good route for us after listening to the podcast (show 364) with Avery Carl, where she points out that you only need 10% down for Second Home loans versus at least 25% down for Investment Property Loans.However, we started talking to a mortgage lender, and they indicated that we would be required to obtain an investment loan if there is any rental income whatsoever, regardless of whether or not we self-manage via AirBnB/VRBO and meet all of the other Fannie Mae requirements for Second Homes.

@Jessica Lawrence - You can key word "ADU" or "in-law" into most Redfin and Zillow searches to obtain this information yourself.However, if you connect with a Realtor, they can automate this process for you to see these properties thru their MLS Subscription. 

The owner told us he got a quote for $7k, but then when I obtained quotes they were all at least double that.

People on BP have posted investment HELOC success with these lenders: Ridge Lending All in OneAmericafirst 80% LTV on noo 65% LTV 15 year 5.74%, UtahArvest Bank AR, OK, AL, MOBank of the westBB&T will loan on a rental portfolioBBVA CompassBoeing employee credit unionCalifornia: Cal Coast Credit Union and Fremont Bank.Citizens first position HelocCMG a financial 70% LTV East West Bank, up to 60% LTV with "no docs”Figure 80% on a rental, not in LLCFirst Florida Credit Union https://firstflorida.cumortgagecenter.comGreat Lakes Credit UnionHSBC 70%, for premier clients onlyHuntington 75% LTV Hurst Lending and Insurance Investment property HELOC in Texas.

I have 20% to cover a conventional loan for third property or should i use an FHA loan to obtain the third house?

I have requested the tax delinquent properties from my county, I would also like to obtain any potential/motivated sellers list. what is a good app, company or website where I can get a list of motivated sellers?

@Han T. any tenant activist group in a bigger market will provide legal counseling and a free lawyer to a tenant.

Most can only be obtained by trekking down to the county court and getting a copy of the specific case.

It would be very helpful if you could/would tell us (a)  the history of/facts regarding the break in chain of title (tell us abou the break itself) and (b) how long the seller owned the property / how did the owner take title to property (assuming Seller is in title).Assuming your/Seller's title company won't start work on this, you could ask title compay/or do it yourself - research the county records and obtain the "last deed out", which is the last deed recorded that placed the current owner in title (title company should have that deed NOW in their records.In my State, if a title company recorded the deed, the title company will type/stamp their name and title commitment number on the deed.