I’m interested in hearing if anyone here has bought a poorly run self storage facility before and what the process looked like for acquiring it, transitioning management, and how you dealt with tenants who were consistently late, paid in cash only, lived in the units, dealt drugs from the units, and did other sketchy things.

Drug use, but no war zone.

I've spoken with a few dealers and the people in this field seem fantastic as a general rule.

It triggers dealer status and the income will be taxed at normal income tax rates.

I closed on my second rental property 6 months ago, a 4 family in the Boston/Worcester/Lowell area in a C neighborhood. 3 units are doing fine, but the fourth unit (inherited tenant) has gone from bad to worse and has now pretty clearly developed into a drug den and includes needles on the ground and people with ankle bracelets staying there not on the lease.

We received an emergency eviction due to drug dealing and safety issues. 

It’s like when people are afraid at auctions because the dealers are there to buy everything.

For equity placements that you are compensated for, you likely need to become an SEC licensed broker-dealer.  

The owner of next door is a major slum lord, no repairs to the building, overcharges for rent, usually 50% of the tenants are drug dealers.

This is dealer vs investor status.Note: Classification of gain as capital or ordinary is determined property-by-property, based on the statutory determination of whether the property is a capital asset or property held for sale to customers in the ordinary course of business.