It might be worth digging into both appraisals to compare the comps and see if there’s a case to challenge the lower value.

that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases: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+ (roughly 5% probability of default), 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 (around 10% probability of default), 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.

It is amazing how many times I have seen the cash flow represented as rent - PITI and to compound the issue they did not realize the ADU would increase their property tax.   

Also Seller hasn’t paid property taxes in 2 years which is a sign the property is in distress.

Once you file your 2nd year of tax returns, you may now be able to qualify for Agency Loans (FHA/Conventional).

You'll be able to defer a bunch of tax with this purchase. 

Also 4th quarter of last year Packwood and county officially did discuss potentially regulating STR's by either limiting numbers or adding a tax to cover increases in local services that are needed. 

Does that qualify for a home office tax exemption?

On houses below $200k, the 70% rule gives you too low of a profit - you need to lower it the lower you go (ie a $100k ARV would probably be a 60% rule).

Our dollar is losing value so you need to be with a solid operator in institutional assets that cashflow in markets while hedging inflation with tax benefits.