Yes this strategy works great especially if the numbers don't work locally.

We’ll only lend after we’ve met and gotten to know you just a little, you must be a full-time house flipper, and you must have a good deal; for which we provide specific criteria.Obviously, this only works locally, and it would be impractical if we had to deploy many tens of millions out of a fund.

I chose to rent to a local law enforcement officer instead because he had a steady job, good credit and lived locally.

Each states laws and procedures for tax deed sales are different and you need to understand the process. 

Your answer would be it depends on a million things.Like the specific property, its condition, location to desirable areas, local STR regulations etc.We would need much more detail to be able to help.

I'm hesitant due to the California laws that favor renters over landlords. 

You've probably heard of big Landlords losing property, but only because they were flagrantly violating Fair Housing, running a slum, or otherwise violating the law in an egregious manner.

I just let Airbnb do their thing and do my normal due diligence on Airbnb guests like asking why they're coming, making sure they have a valid ID and try to avoid locals unless they have a good reason like home shopping

@Derrick Lind I don't know specific CA law but in most states a tax auction or foreclosure clears the title of all liens.

My hope is to begin building my portfolio (probably fix/flips) this year while I continue to work with local investors on helping them build theirs.