This creates a negative initial position.

If you think of depreciation as a negative appreciation I think you get to the same place. 

Despite rising interest from young families and institutional investors, the number of new SFR and BTR units is expected to decline sharply, from 34,000 in 2024 to just 9,500 in 2025, a 73% decrease.While demand remains, rent growth in this segment has turned negative, falling by 0.8% in Q2 2024 due to higher vacancies in 2023.

@Albert Hasson no doubt any strategy you pick will have pros and cons, that's why most people never end up investing in real estate, they just focus on the negatives.

The LLC’s could be put into a trust which would negate the tax downsides at the time of my fathers passing (which hopefully won’t be for another 30 yrs or so).

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

I know most of us here know these definitions, but just to make sure we are all on the same page.The main negative with MTR arbitrage is that since you do not own the unit, you get none of the benefits of being an owner.

BP is a great place to get started.An A/B class property in Cincinnati will be cashflow negative for the first 4-7 years.

But agreed it would have been challenging and negative to pursue- and not worth it.

That will have negative tax consequences.