@Ben EinspahrHouse hacking in Denver metro areas involves lenders reporting rental income on Schedule E, accepting 75% of STR/MTR income from lease agreements or appraiser's estimates, and requiring additional proof via tax returns.

Start-up costs are also deductible but are amortized over 15 years with a limit of 5k.Start-up costs have strict rules and your case might not be the same as this one.Case Summary:Timeline line of eventsStarted investigating property: FebPut first contract (canceled): MayBought first property: December 30thWhether a taxpayer is engaged in a trade or business is determined using a facts and circumstances test under which courts have focused on the following three factors that indicate the existence of a trade or business:Whether the taxpayer undertook the activity intending to earn a profit;Whether the taxpayer is regularly and actively involved in the activity; andWhether the taxpayer's activity has actually commenced.On the basis investor testimony, we may assume that he undertook this activity to make a profit and that he regularly and actively engaged in it.

B. tested the unit to see if it's actually defective.

Here's a quick test... call the company yourself, see how long they take to answer the phone and how they answer the phone.

The reality that neither view is realistic or probable.The best advice I can give would be to underwrite for long-term leases as that can be an acceptable exit strategy, but be prepared to execute well on your MTR strategy (great interior design along with profesisonal photos and concierge servive). 

Cash for keys teaches them that not paying, not abiding by the lease, or not taking care of the unit is not only acceptable behavior but behavior they get rewarded for.  

@Zac Gorski of the lease goes through May 2025 there’s nothing you can do unless offer cash for keys which they may not accept.

Structural review is just the first cost after your offer is accepted.

@Kenton Guidry - start by reading this thread, including my posts there: Any help for a newbie wanting to start off a real estate adventureThere are plenty of people who do flipping - figure out a problem you can solve for them and they will gladly accept you to shadow them.

I believe my wife and I pass all the test under REPS and material participation.