From my understanding, Alabama changed the tax sale system in 2020, and most counties now only do Tax Lien auctions.

Further, he's using an @gmail.com email address—don't get me wrong, I run my RE business through my primary @gmail accounts set up for the LLCs, but as a legitimate tax-paying lending company? 

So, I could still use or lease the lot once I have the deed just wouldn't be able to sell it or clear the title with the lien there or would they force me to pay off the lien before using it?

Then why would you consider paying $1.3 million for this property - $70,000 over value?

To me, that's a LOT of money to pay.

Many people focus on the “entitlement amount” but the more important number to pay attention to is the ‘county loan limit’.

As for other properties, you can use websites showing tax records here https://www.crimpr.net/ and perhaps use skip tracing services like TLO to find owners. 

Is there any way to avoid paying capital gains tax if I eventually sell?

I declined to pay for the repairs.

How much did you pay for it?