-The STR report supports a small jump up in brand to something like a Quality Inn with numbers that would support a $75+ ADR with 50-55% occupancy.

Knowing the area, I don't feel it would be too hard to achieve max occupancy, the owner told me he just put in every other lot because he didn't like it to look crowded.

The city requires a pre occupancy certificate.

Yes, been opened minded more than you can imagine in those respects, the issue is that you're knocking on the door of seller financing to an owner occupant, not an area for the faint of heart, especially if the have credit issues. :)

If they are all on the lease and not listed as occupants, I was billed for serving each one with papers.Otherwise its just served to the lease holder and I include "and all other occupants"

VA occupancy rules require I occupy the home within 60 days, but it may not make sense to move on my own dime twice in the next 10 months.

If I forced every one of my current tenants to get a bank account that doesn't currently have one, we would be at 50% occupancy over night and have a tough time filling up our apartments.  

Though their focus is on SFRs, I think a majority of their inventory likely resembles what you've described (e.g. product priced based on the 1% rule in neighborhoods unlikely to appreciate.)That said, the handful of homes I've found do appear to me to have potential.These are homes in neighborhoods with average or above-average schools, 80-85%+ owner occupancy, very low crime, and trailing 5-year average appreciation of 2.5-5%. 

If they are late again and you serve them you can proceed with the eviction and accept any rent money for use and occupancy only.

The VA pays rents at 100% occupancy whether the properties have vacancies or not.