Spending an hour with a CPA who understands your overall financial situations would be time well spent, but there are some general rules of thumb:If you hold the asset for less than one year, your profits are considered short term capital gains - which are taxed as ordinary income at your standard tax bracket rate. 

If the taxpayer sends the improvements affidavit to the investor by certified mail, and it has been more than 40 business days since the affidavit was sent, with no response by the investor, then the taxpayer will be allowed to redeem anyway.Shelby County will note their files if an investor claims to be entitled to payment for improvements.

My first instinct is to apply the 1% rule, but how do I know what a property is going to realistically rent for?

Some people use the "70% rule" some don't.

It will help improve your understanding of how to not only purchase properties at tax lien/deed sales but how to get them ready for sale and maximize your profits. 

Not all rules apply the same when you are changing scale in developments.

Providing access to the MLS to someone other than that is not only a violation of MLS rules but is also a felony. 

The same owner occupied rules apply as John stated in his reply.

What I suggest is getting a job for a few years that allows you to save some money and improve your credit.

If updating the interior or exterior will allow you to increase rent and get paid back in "x" number of months, I would do it.On the other hand if you have good solid tenants I wouldn't mess with anything.Since your grandfather had these for 20 years some of the tenants may be due for a rate increase without any improvments