i'm new to BP but I dabble a bit in real estate and am involved with the deal so a couple of notes that may help your analysis.Smart move made by sellers is a 300 security deposit; helps keep the units in at least reasonable condition as that is a decent amount of money for some of these tenants.First off I'd classify this property as C+ maybe even B-.  

Network, social clubs, chamber of commerce, newspaper advertising , craiglist, car signs, Youtube, investor clubs, school board meetings, church groups, Personal lawyer, mailings, foreclosure lists, neighborhood door knocking, drive bys, grocery store bulletin boards, Trulia, Zillow, realtors, expired listings, RealtorTrac, FSBO, Garage sales, Open houses, Family reunions, Fire truck chaser, Funeral chaser, Floods, Classified ads, Apartment rental listings in newspaper, Current Tenants, Hud home auctions and listings, REO's, Real Estate auctions, Auctioneers, Appraisers, Relationships with Building code inspectors and others in office, Propertry Tax sales, Sheriff auction sales, Soliciting mailings to Probate lawyers, Real Estate seller lead providers, GURUS that have lead programs, Start an RE investment club locally, Hold seminars local on how to buy a home or sell your home. and on and on and on.

HOEPA imposed onerous penalties for loans that were classified as " High Cost Loans"   HOEPA would also rescind (write off) a loan if it was determined that the lender had not documented the Borrower's Ability to Repay. 

If you go into too much detail telling them how to do their job, how many hours to work, when to take breaks etc your state may classify them as an employee even though you don't!

@Wojciech Grajewski, If you want to classify that property as an investment property then you simply need to treat it like an investment. 

The same applies to a Conventional purchase classified as investment.

Is it possible to do the 10% down and still classify it as an investment for federal tax purposes? 

It would not be enough equity to justify a Private Equity Real Estate Fund, but am unsure what other fund type it would be classified as?

Having grown up in Willimantic (you'll laugh if you know the area), I wouldn't quite classify it a slum, but definitely not my ideal place to raise a family.My question is this: I am highly interested in the BRRRR method, and there are several multifamily properties in the "slums" that I am interested in.

I believe the best solution would be to classify the new purchase as investment, rather than primary, using Conventional financing, and request the lender to have the appraiser add on a 1007, wherein the appraiser provides an estimate for the long-term monthly rent.