Purchase price: $115,000 Cash invested: $42,000 Sale price: $168,000 Unfortunately, we bought this property as a buy and hold property, and our research led us to believe that this neighborhood was up and coming not in a bad area of Jacksonville.

This is not a one size fits all answer, but bad debt is non-asset based or depreciating assets - , credit cards, medical, buying dumb stuff.Good debt is debt used to make or grow your portfolio. 

I could see this fit into several categories of 'real property trades or businesses.'

We both live in MI and my current plan is to invest in single- and multi-family in solid, path-of-progress neighborhoods in metro Detroit, and also get some larger SFH's in the more expensive market where we live and do rent-by-the-room/co-living.

house hack in some sort of fashion.Either buy a duplex or large single family that you can rent out a room/side of the houseOr buy a fixer upper in the best neighborhood you can afford. 

Pick something that fits your style and investment of both time and money. 

Try it out first test out whether or not you two are a good fit before building a massive portfolio together.Create an operating agreement for your LLC, and create a partnership agreement, defining roles and expectations.

If the property is a rental property (not a primary), DSCR loans are typically a good fit for your scenario.

Hey Andrew: The Freddie Mac Small Balance Loan (SBL) and Fannie Mae Small Loan multifamily programs could be a good fit for a project like this.

Not to say it can't be done... but I don't think there's any "one size fits all" deal structure.