Given experience, feel free to share where you would you start if you were in my shoes and if you're willing to have a further conversation to help me get going!

Your unfortunate experience is summed up in the word ‘trust’.

Could you please share your experience of how you go through these obstacles and how do you choose your state and properties to invest in (if you are investing in tax deeds as well)? 

Finding the right team to assist you in your journey is what is most important, that way you have guidance, experience, and a partner that is looking out for your success in your investment. 

As far as down payment, investment properties typically require a minimum of 20-25% depending on property type, FICO, level of experience, occupancy %, etc.

I am hearing you when you say you had the builder fix the grading issue, but grading is in my experience the #1 cause of repeated water in the basement.

Initial budget $250-600k +- Please advice if it's seems like an ok plan in your opinion (preferably if you have personal experience). 

This will give you some hands-on experience and an opportunity to put into practice what you have learned from reading the book.

My big question is when quoting a renovation, since I don't have the experience what is the best way to come up with the right ARV so I can make the right offer.

Hard Rock Hotel (Downtown San Diego) has offered investment ownership opportunities for certain rooms within their establishment... has anybody had experience with this or horror stories of such investments?