A colleague recently closed on a 12-unit property in San Antonio and shared that a 6.8% cap rate, combined with lower property taxes, made it a no-brainer.

Also Seller hasn’t paid property taxes in 2 years which is a sign the property is in distress.

Take the tax free sec 121 first and then 1031 the leftover.

It will have to be a pass through/disregarded LLC to keep the tax payer the same and the 1031 valid.

You can probably beat $2000/year insurance, but the management fee should be 10%, you need to factor in turnover too and 5% is probably not enough for both maintenance and turnover and I assume you added it, but you didn't mention property taxes (which have been terrible in Jackson County lately since Frank White decided to jack them through the roof). 

@Andrey ShostakA tax calculator would be nice.

This is largely due to the fixed nature of ongoing maintenance costs, which become proportionally more impactful as the park size decreases, thereby inflating the expense ratio.

Very simply, large corporations pay into the tax base of that local community and that revenue is used to improve the community and make it a more attractive place for people to live.

As more people placed more properties in STR inventory, and as more municipalities taxed and regulated the industry, the profitability of the overall industry has reverted to a much more aligned (lower) risk adjusted return.  

Certainty of a buyer's ability to close is always important, but it's even more important right now due to the market conditions.