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. 

Realistically there is no guarantee you will want to or be able to continue holding properties as you age.

Credit worthiness is nice but really loaning on the property vs. the person although I require a personal guarantee.

I can all but guarantee if the IRS comes knocking it will be more money (back taxes and fees) than the tenant has.-- It's illegal.  

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

Absolutely guarantee they will call off the auction".

Meanwhile, you will pay a very high price eroding whatever profit you expected or worse...going into negative losses as ongoing delays caused by Sherman Bridge Lending force you to pay spiked interest rates for an extended period of time leaving you at their mercy as they control your refi by threatening high fees as a penalty for seeking refi elsewhere.