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.

This can’t have a lower rate of theft/fraud.

(Lower interest rate, easier to qualify and lower costs.)

., Smyrna, Decatur, Marietta), new construction or turnkey rentals for lower maintenance, or small multifamily properties for stability.

If you tie the bonus to a new lease, a bad employee will lower standards to find tenants quickly.

Having professionals we can call to see how backed up they might be factors in as well - if we can't get a roof done ASAP, that holds everything else up if we have a leak so again, more time, more holding costs, lower ROI.Unfortunately I do not think there is a magic metric that can tell you if the deal is a winner or not. 

We are looking towards STRs in order to lower our W-2 taxable income via cost seg and bonus depreciation.I believe my line of work qualifies me as a REP, but what I am not clear on is whether I would still need to meet the 'material participation' requirements in our rental business in order for our losses to be non-passive.

It will give you a lower interest rate on both properties because you bought them as owner occupants, and it will require less down payment to get into. 

I have several CFO clients that do similar heavy rehab projects in the Midwest (albeit with a lower purchase price), so you can definitely make the numbers work. 

Putting 10%+ down with a different lender and getting lower points and interest is 100% better.