Not sure a life estate adequately accomplishes the intended outcome, anyway.My instinct is that I would keep the inherited house as a rental property, either after my step-dad passes away or chooses to move out; or, by renting it out to my step-dad for the rest of his life and, after his death, to other tenants. 

Many investors from California, are choosing to invest in the midwest because of the yearly returns making more sense in these lower priced markets.

You can choose to view it as a liability if you like.

There are more listings to choose from now than any other time in nearly a decade.

Choosing a market for your first investment should be as close to local as possible or you won't learn anything and will be too hands off.

With so many options on funding it’s so hard to choose as a first time flipper.

I recommend being as precise as possible e.g. choose a market if you haven't already.

I decided to give them the option to break their lease and leave, if they so choose, which they haven't responded to yet.My question is, has anyone dealt with a similar situation who may be able to give some advice on this?

., 17.5 years remaining for residential property).New Schedule: Simultaneously, start a new depreciation schedule for the additional cost basis attributed to the replacement property, following standard timeframes (27.5 years for residential, 39 years for commercial).Option 2: Treat as New AssetCombined Basis: Treat the entire cost basis of the replacement property (carried-over basis + additional funds invested) as if it were a newly acquired asset.Single Schedule: Depreciate the total cost basis over the standard timeframe for the replacement property type (27.5 years for residential or 39 years for commercial).If you choose option #2, you need to file an additional form (4652) with your tax return. 

With a maps subscription you can search an area, choose a zoning map, and even overlay Opportunity Zones.