When you convert to a rental, the basis for depreciation becomes the lesser of the fair market value or adjusted basis on the date of conversion.

Fair, I can see how I was scatterbrained there.

We try to warn our buyers about this and to use one of our trusted resources that is normally local, in the business for years, super knowledgeable and has a local reputation to defend and maintain. 

HUD publishes the Median Fair Market Rent on their web site for the entire country.

I would disagree with number 2 - in this environment, heavy rate buydowns are a common tool in the toolkit for lenders and borrowers to make deals work and are in no way indicative of "not being well-capitalized"That’s a fair point in regards to doing a buy down, we see that quite often but we roll the buy down into the loan so those aren’t paid at closing, thus not costing the borrower funds out of pocket at the time of purchase or refinance. 

As long as you stay under four units, you're not governed by the Fair Housing Act, which has some accessibility requirements.

Fair enough. 

I'm fairly certain if he was required by probation/parole to register as an SO and he didn't, there will be a warrant for his arrest.  

@Armando Carrera research and develop your own typical tenant qualifications so you don’t accidentally violate fair housing, landlord/tenant or local laws on occupancy limits based on bedroom quantity/size required for kids, number of unrelated persons in one house, etc.

Ensuring that you have, and continuously maintain, a safe property for guests, is barely even an afterthought for most STR investors.