This is probably a non-starter but if you have access to 35K in cash from somewhere ( savings, loan, equity from somewhere else) you can exchange that cash with the note in your exchange account during the exchange period.  

You can try to avoid having each one ding your credit, but generally as long as you are within a couple week period multiple dings are not too bad.

@Anthony Brooks if you pm me your email address I can send you a spreadsheet of every counties method, redemption period, online/ offline, bid method, etc.

The banks are now selling their foreclosure homes during the redemption period.

Even once a tax deed is sold the owner may have a right of redemption period. 

Basically it boils down to this:  If, when you are purchasing a property, your intent is to sell it, then it's pretty much always going to be treated as Self Employment Income (Flipping), regardless of the rental and holding period.  

I know about the 1031 exchange but id rather not go through the stress of FSBO and trying to buy a house in a shirt period of time. 

Agreed on the aspects of hold period then transition to more tenant desirable properties, which in turn provides more predictable cash flow. 

It is extended for applications on owner occupied purchases and refinances, but includes two families.

Once the bank sold it's entire inventory, I think it would be a gold mine but the absorption period is likely decade+.