There are rentals, fix and flippers, lenders, tax liens, note investors, STR, commercial etc.

But as stated probably not for tax purposes for the seller. 

The property owner's tax professional can help them with that and ensure they don't pay taxes twice on the same income.Disclaimer: My advice/opinion in this post is just that, my opinion.

Given the market conditions and your hard money loan, it might be wise to first calculate your monthly holding costs, including loan payments, taxes, and maintenance.

Malibu allows it but requires a 15% "hotel tax" on the gross revenue.I would recommend looking out of state or underwrite the property as a long term rental in the event laws change.

In North Jersey, buying is difficult from my beginner perspective with high prices, property tax, etc.Barrier to entry feels high in my area.

Approximately 6-8 weeks ago my attorney stated he was unable to get the delinquent tax 'owner' nor the squatters served in this matter. 

What paperwork should I keep a paper trail of to make things like taxes and other situations better/easier for myself?

A lot of lenders used to apply 35% for expenses, but in the last several years, the numbers for supplies, labor, utilities, taxes, etc… have increased significantly.Also take into account the age, occupancy and how has the property been maintained, this will affect the expenses too

Could VRBO users from Michigan provide some clarity about the topic of sales tax/lodging tax collection and payment to the state.