The strategy is best described in Joel Greenblatt's fantastic book, and an outstanding practical guide and tool for executing it can be found over at the Magic Diligence website.You can do either (or both) of those using the "leverage" of Options, allowing for substantial upside potential compared to standard stock purchases, with dramatically reduced downside (if you want a no-hype education on Options, Erik Kobayashi-Solomon's book is great).Those with the patience and inclination can indeed use Option trading to make money in any market condition (Wikipedia founder Jimbo Wales, Amazon's Jeff Bezos, and "Black Swan" author Nassim Taleb all spent time -- and made lots and lots of money -- as options traders in their careers).For even more leverage, you could of course do any of the above (and much more) on margin (meaning your brokerage lends you money to do the investment), though that's not something I would ever do personally.Also, if you focus on holding stocks (or options) for at least a year, you benefit from favorable tax treatment of the profits.

Yep, those of us with assets get special IRS treatment.

So I only end up saving a little money (fortunately, I've always picked tenants who lasted for multiple years, so re-leasing hasn't been an issue).  

I am told they don't offer any favorable treatment for multiple properties, is that common or are there landlord friendly co's that taper their pricing?

You will want to balance this treatment with your DTI needs, which is a critical decision.  

That said, I still analyze and make sure each of my deals (...in Fort Wayne) work using the 50% rule even though I know they'll perform better than this.Always better to be pleasantly surprised than sorely disappointed.

If mold gets on the wood there are treatments to sand and coat the wood that make it hard  for mold growth to re-occur behind the drywall. 

How long has the tenant been receiving treatment for this specific impairment?

Kilz prime all walls and do ozone treatment before you start to replace any of the stuff you've ripped out..

It's outdated and an eye sore in a red hot neighborhood that I'm very familiar with.