He sold me a home for $225,000 that he purchased for less than half of that and said he will be putting in $100,000 worth of rehab work and thats why he was charging me so much more. 

I purchased it mere days before it was going to auction.

To top it off the few that did recently froze due to the economic situation. 

Best there is at navigating the complex landscape out here and helping you make the right purchase to be competitive in the STR market. 

I have purchased OOS rental properties but always used an agent.

Above is picture from original listing purchase.

My recommendation is to choose cities in safe and economically diversified areas with above-average income and population growth.

I purchased the house for $145,000 and they were asking for $180,000.

In addition buying an existing ADU has the following advantages over building one 1) typically pay less for the ADU than the cost of doing a hands off ADU addition 2) get RE purchase financing which is superior to financing that is specific to the ADU addition.  3) there is no delay between financial outlay and income when purchasing an existing ADU.  

Specifically anyone who has purchased in the last 12 months.