For some reason we all failed to include the tax sale properties in their estate planning.

I recommend that my clients use life insurance to plan for the future tax obligation: either there will be a death benefit to pay the tax or there will be cash value that can pay the tax.Even if the seller chooses to remain in real estate, when they buy their next property, they will start off with a fresh depreciation schedule.

I always run my STRs with LTR rents also, as my back up plan if cities change permits or cause me to switch to LTR 

Do this for the whole house and then add on 20% for complete unknowns.Realize that there is some reason that this owner does not want you to see the inside of the house, and plan accordingly.

I think the biggest question these days is how long are you planning to hold this?

I would recommend talking about these scenarios and laying out a plan to address them individually. 

-How will you plan for the utility connections required for my project?

May plan is to pay cash and wait until interest rate improves, then refinance and pull out $150k for a down payment on a second property. 

It's one of the lowest risk ways to get into RE investing and a great plan.

See Nobel prize winner and associate  quote....Gunner Myrdal, an architect of Sweden’s welfare state who was given the Nobel Prize in economics as the left-wing balance to his co-winner FA Hayek:  Myrdal stated, “Rent control has in certain Western countries constituted, maybe, the worst example of poor planning by governments lacking courage and vision.”3 His fellow Swedish economist (and socialist) Assar Lindbeck asserted, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”Seattle is a prime example.