:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

But it's walking distance to the beach, in a great location, and had tremendous potential as a STR (which was the primary goal) and huge upside for appreciation.The only things I would rule out, and would advise my clients to consider walking away:  Major basement water problems, significant structural issues, and evidence that prior work was shoddy, or that work was done to cover up a bigger problem. 

Plumbing drains, water, and electrical were all VERY easy to run. 

NOTE 2: if we choose NOT to upgrade the rooms, the units can't be in the hotel's pool of units to be rented out to guests.NOTE 3: right now, I'm losing about $1,500/moMy gut tells me to just get rid of this unit at a loss but I have a few questions I'm hoping someone can help me with (so far, I've asked some RE professionals I know but they don't have any idea).1) If I was to pay the ~160k for room renovations, does this mean the room increases value by at least that same amount? 

Thinking I can ask between $2200-$2500 since it's a little more square footage and has a deck and pool.

The more states that you are willing to buy in, the greater the pool you get to pick from.Generally, notes with properties that are in states that have longer timelines to foreclose will have greater discounts to account for the greater risk and longer time commitment.

In my specific case, the tenants pay electricity & gas, but the previous owners were paying for water.

If the seller is offering zero compensation, that property could be out of budget from inception or drastically reduce the seller's potential buying pool as initially it might appear out of the buyer's budget or feasibility if required to compensate their side directly. 

There is demand for this, the market you are in dictates what your rental pool looks like.

Demoed the whole house except one wall added 3 extra bedrooms 2 bathrooms customer fixers raised ceilings a pool and many more details.