I would look to go north along Castle Rock Lake or even up around Petenwell. 

Do conventional loans even allow STR or is it indifferent between LTR and STR?

Even if its criticism, anything is helpful!

Even if some counties are still issuing deeds today, what's the chance that tax deed issuance will be stopped in 3 years, given this recent case?

We have not even begun looking for a lender in the area yet and I am hoping to find the right one here.

But we would still have to pay the capital gain taxes even if made overseas in Belize.  

I've heard a few opinions on this, and I've seen varying evidence in my market research.As an example, just this evening I'm pulling sold comps for a house and one of the highest sold price per sq ft comps is located literally right next to a railroad track, and has a massive commercial building right in front of it.

it works even better with new construction rentals.   

The Austin metro is sitting at super low unemployment rates 3.7% even as the metro is growing daily as the employment force expands rapidly.

For example, it's hard to justify airfare for one duplex, but much easier for an 8-12 unit building and even better the more you get.