The ARV value came back at $201,000 and a condition rating of C3 with a reported median rental figure of $1,595.

The pest problem is most likely due to the tenant keeping their dwelling in an unclean condition.

The latter also encourages them to leave the place in good condition and to make it available for showings (with 24 hours' notice and grouping showings-never leave perspective tenants alone inside if the house is occupied).

They just need the tools to handle the distressed conditions. 

When you buy a tax deed you have no idea of the condition and you do not get to inspect the property.  

We have submitted fair offers considering the condition of the property (sellers don't keep up with the maintenace and repair as they should, for a property that they are going to lose and get no money only some debt relief.) 

(I wrote about it in this thread.)The New York Times has indirectly addressed your question a few times -- in this 2019 story and this 2023 article -- where they discuss areas that will fare better in an era of extreme weather and climate change.

Even if your units are in great condition, most residents won't be able to afford a $200/mo increase in rent. 

To a certain extent, it's not worth it to work on files with tough conditions without a bottom-line base origination fee.

We use these factors in this order of importance (feel free to create your own):1) Tenant pool credit score2) Location => Neighborhood3) Property condition & amenitiesClasses are not defined for the SFR industry and are relative to the area.