I recommend finding a market that has the following: good employment trends (it should beat the national  unemployment rate)job diversity (no one industry makes up more than 40% of the economy - the lower the % the better) good supply and demand - check out the availability of homes compared to the # of people looking (it's called the Absorption rate) a good team that is experienced and you trust (probably the most important because the money is in the execution of the biz plan, not creating the biz plan) 

That means a proper business entity structure to insulate you from as much liability as possible in the event of a lawsuit.

What  that proper service.if there is a payment plan in place, and can the 2nd position lender request for the release?

We plan to be honest and set clear boundaries.As far as the 'eviction' goes, everyone is on a month to month agreement so we'll give the proper and legal 30 days notice. 

If they are, then you can change the terms (or terminate) with proper notice.

Clearly, it demonstrates your ability to initially transform a bad situation and coupled with that you showed your tenacity, decisiveness, ability to execute an action plan and being sequentially rewarded along the way with higher sales prices.

My main purpose for this post was to discover whether what I am finding is typical and I need to reassess notes as an investment strategy or if my experience is merely the result of where I have been looking and with proper guidance I could find that notes are a good investment vehicle. 

I think after this property is properly rennovated, I shouldn't have a problem finding a decent tenant.  

They are called "accessory dwelling units" and are only allowed in properly zoned areas.

Notify the proper authorities and take this out of your hands.