His house value has diminished because it will no longer be a fresh listing.

When you start hitting diminishing returns from research, get out there and do a deal.

Our property value has diminished and Realtors have told us that it won't be easy to rent or sale the building now that there is a logging camp next door.

Regarding flipping it, your market will tell you how it is perceived,  in the northwoods of WI (where i own 3 of them) there is a slight diminished value around 10% compared to site built, but not always. in the Fond du Lac market where I worked from 2006-2015 there was little to no stigma attached to modular homes, I have flipped and sold several over the years.  

I didn’t have to manage this rehab in any way, but for the first few years of ownership my concern for major capital expenditures coming up is greatly diminished.

Where is the point of diminishing returns?

It's a good staff and they don't have any interest (I don't believe) in diminishing your forum experience; sometimes things that seem like they'll work well in concept don't play out as well in reality.

Plus, demand is diminishing quickly as we head into recession ...so, that could be a perfect storm to put a lot of STRs out of business. ...Also, air bnb recently changed their platform to focus on top-tier, highly unique properties (think: luxury beach front tree house)--as a result, a lot of the more "typical" units are getting pushed down in priority on the platform, and are having problems with vacancy.  ...so, these are issues you'll definitely want to read up on carefully (if you haven't already); there have already been a number of podcast episodes / blog posts / articles on this topic for you to check out...at the end of the day, you'll want your financial models to include some really serious "worst case scenarios" (e.g.; extended vacancy) to stress test your model before you do the deal...If you do the deal, you'll definitely want a thorough contract that outlines all the responsibilities, authorities, obligations, etc. of both parties, and which outlines processes for as many eventualities as possible (for instance, her/your rights to remodel parts of the property, her/your decision making authorities if one party decides they want to use the property differently than originally planned, or if one of you decides you want out of the property, her/your responsibilities for repair costs, processes for dealing with unexpectedly high vacancy, etc., etc., etc.)   ...I'd suggest listing out as many of these issues as possible, coming to an agreement on them, then drafting a contract and sending your contract to a contract attorney for review before you sign...If you do this deal, definitely keep us updated on how it goes--it sounds like an interesting one!

@JD Martin your place sounds like a slice of heaven and for almost free it doesn't get any better.I do live in my home that was a rehab but the growth and increased traffic has diminished the quality of life here.

You can get a credit tenant loan at much higher LTV's from lenders because they see it as less risk.With the seller holding back a second you can get in for not much down.Hit a CAP of 7 to 9 going in and with triple net sit back and collect mailbox money.The downside is rent increases are set in stone and may not rise as fast as inflation diminishing returns.Also you have to pay special attention to the vintage of the lease.Typically they go for 20 to 25 years total.A newly signed lease has more security after the store has been built than a vintage 15 years in.They could decide not to renew and when you rent out to the new tenant as a second or third generational space the price per sq ft will typically be lower.So with 2 million I would do some safe CAP properties and then mix in the distressed multifamily for aggressive growth.