The key factor is ensuring the property qualifies for favorable tax treatment by adhering to IRS rules regarding short-term rentals and material participation.For the 7-day rule, the IRS requires that:The average guest stay must be seven days or less for the property to qualify as a short-term rental.If the average stay is 30 days or less, you must provide substantial services similar to what hotels offer, such as daily cleaning or concierge services.Regarding material participation, to further classify the income as non-passive, you must meet one of the following criteria:You spend more than 500 hours actively managing the rental in a year.You manage the business yourself and spend at least 100 hours, with your involvement exceeding that of any other person involved in the rental.Please note there are actually 7 ways to qualify, the above two are the most common.

Also I shopped very frugal, I would buy a lot of material wholesale or through auctions, and also I had the ability to buy from a former employer, a manufactured housing factory, that was also a huge savings for me.I had to do this deal this way.

@Saleh Riazi Google Intel factory New Albany, OH. 

The next factor is since you are looking to use that towards a down payment for your next investment you will need at least 20-25% down payment.

And they had this new factory built (que drone videos).  

While this leads to operational headaches, the bigger factor is the next one.Your lower quality tenants, typically, create heavier wear and tear and turn over more frequently.  

@Bryan Field I have one that’s 35 minutes away and in terms of me being able to get there the distance is a factor. I

Admittedly I am new-er to the Valley, but from driving all over it, it seems that the West Valley is going crazy...they are building as fast as they can. 2 new chip factories and tilt-ups everywhere.I'd bet on the West Valley if it were me....

Providing fixed costs, factory monitored conditions/precision and rapid timelines (as short as 2 months for a full 4 unit apartment to be delivered and rentable to our site), we are strong believers that modular is the future of real estate. 

This project, known as the Megafab factory, is expected to create over 50,000 job opportunities and contribute nearly $10 billion to New York’s real GDP over its first 31 years.