They are worth their weight in gold I saw this happen years ago.

Just finished paying off my student loans last month (huge weight off my shoulders), and am looking for more ways to become financially stable while owning my own property.

You've traded 'asset protection' for limited financing options.If you don't care about getting spam e-mail the rest of your life, try lending tree or quicken/rocket mortgage maybe just to see.

Because you are a first time landlord, first time filing a Schedule E, and the questions you are asking suggest you are not very familiar with the jargon and terminology used in the real estate and mortgage lending business, I strongly suggest you use a professional to prepare your tax returns, both state and local.The real value of a CPA is not to prepare a tax return, but rather, the tax planning advice the CPA can offer for your investment strategy throughout the year. 

@Philip WilliamsJust came across your post today; it was featured on one of the BP E-mail Newsletters. 

Do I list them as an operating expense on schedule E even though they occurred before the in service date?

Everyone on this thread has made very valid educated points.I don't suggest this for a newbie living paycheck to paycheck; but if your in a financial position to bear the weight of some repairs and vacancy out of pocket, this may be a great long term play.Although we don't typically invest upon speculation, an educated person could make an assumption So Ca will continue to increasing in value over a long term period.

Think a list of qualifications that applies a weight to each trait:Credit Score - XPets - XIncome - XPrevious recommendations - XLength of proposed lease - XDeposits - XTransunion gives you a go- no go decision but the above may help you grade the quality of each potential tenant while being objective.   

I love the way Phoenix roads are all either exactly N-S or E-W.

The proforma will have numerous data points that require research: rents, operating expenses, city impact fees, build costs, soft costs A&E.