The bank they are using with that offer is now saying my site prep bid came in way too high and not approving me (so far. still in process).

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.

Even though the nightly rate is high, the RE has such high value that the margins are fairly tight.  

You are a high w2 earner, The house is worth 110k today, you are buying from your grandma for 60k in exchange for free rent for life, upside ARV of 200k.The costs of owning the house will help provide tax relief on your high w2 earnings, you are buying a great chunk of equity that will pay off in the future, and you and your grandma are doing each other solids. 

I work with a lot of MTR investors and what I am seeing frequently with multifamily acquisitions, particularly with new investors, is that they often test the property just like you're mentioning, as a way to dip their toes in the water and see what works in their area and for their personal style.

I've been a real estate investor my entire life, doing my first deal as a senior in high school ($5,000 mobile home).

We bought a home built in 1900, insurance water damage coverage is 10% of the dwelling limit. 

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.

The pool needs a new liner, and I do not know if the pumps work because there is no water in the pool.

If you offer more $ for the property than the all cash offers AND you appear to the seller to be highly qualified in the method you are using for sourcing the payment, at some point your offer will be more appealing than the all cash offers.I don't understand why you would consider a 1031 for another property in two years.