It is strictly a long term appreciation play so adjust your horizon and think long term.

However, the IRS has strict rules about material participation.Regarding the LLC, forming a single-member LLC for your rental activities can provide liability protection, but for tax purposes, the income is generally still reported on Schedule E of your personal tax return.

A lot will depend on how strict your definition of “interest” is.  

There are not unified terms within the lending space to differentiate a lender like myself that lends out their own capital in defined ways secured against real estate, a lender that is more synonymous with 'hard money' that has very strict underwriting criteria and documentation requirements, a friends and family lender that may give a borrower money for the downpayment or closing costs - or even DSCR lenders that will offer permanent debt on properties.It gets confusing for borrowers.

I think it’s fair to decline based on history of homelessness and drug use, but I’m worried I’m being too strict. 

They're unique in the Denver metro area in how strict they are.

VB is fairly strict on STRs.

Although one thing on that: my strictly commercial colleagues are all complaining that they're down 50-70% from the previous several years. 

I'd say the key things that helped me is to only work with property managers I was referred to by other investors and establishing a very strict set of checklists, guidelines, etc. that they operate under.

Well, IMO it just can't compare to some other fast moving markets like Texas and Florida for example and should be considered as a strict cashflow play.Columbus, Cincinatti and Cleveland move quicker with higher demand and more infrastructure also IMO.With said, Toledo's growth the last few years has been whopping and as @Ahmed Alswaiti mentioned is predicted to grow even further this year.Not a fan of predictions and I always advise looking at the numbers in the deal TODAY and if they make sense.Any appreciation is just the cherry on top IMO.Still buying sub $100,000 properties that easily exceed the 1% rule here.Not sure of many markets that can take claim to the same.Just negotiating on a 6 unit in Point Place (Toledo folks will know the area well) for $160,000.100% occupied.Needs around $50,000 in rehab or so.Optimize rents to $4,500+ per month and ARV should be $350,000 - $400,000.Get 4-5 of those and pina coladas in the Bahamas 😁Find me another market with such deals and I'll be there hehe