The losses are attributed to the S-Corp stock and to keep things simple lets assume the trust holds no other assets.   

But make sure that each transaction is carefully attributed to a specific client AND a specific property of that client.

However, this deal is extremely tight with financing and the hypothetical new building would not cash flow well enough if it has the same attributes as the first building (if it cash flowed at 5k/month like the first building, we’d be adding 4.5k/m of debt because it’s 75% financed which would be too tight and not worth the effort).I’d find a use for this 250k - maybe several smaller units, a syndication….etc. 250k can do a lot of work and purchase a lot of solid units to increase the cashflow and very quickly get you over the original 5k/M.

Recently a unique opportunity has sort of fallen in my lap where a good friend, also a real estate investor, has vetted a home in eastern PA but is now in a situation where he cant make the purchase, so he recommended I look at it and while it doesn't make the 2% rule there are other attributes that seem to make this a sound investment.

@Wells MangrumYou'll want to work closely with your CPA or engage a CPA who will examine your facts and circumstances as donation of appreciated (FMV > adjusted basis) assets previously used in a trade or business is complex and not as straightforward as donation of cash or appreciated stock.Generally speaking it's advisable to hold the property for at least a year and you'll get no benefit for the portion of the unrealized gain attributable to Sec 1245 Recapture & Sec 1250 Unrecaptured Gain (Treas Reg §1.170A-4).Also very advisable to have a 'qualified appraisal' done on donations of real property to charitable organizations.

What are their attributes you want them to have?

Having compassion for people is an attribute not a hinderance.  

Yes, networking seems like one of the many great attributes this site offers.

While C class on the other hand might be okay to invest in but be prepared for more hands on management of your property, both in terms of attributes and fixes to the home and tenant management.

I attribute it to the section of Pawt.