Even if I were to collect the late fees it doest’t materially alter my properties performance and my tenants appreciate the flexibility in the very rare circumstances where they are late. 

Typically a cost seg can provide a ton of benefits to accelerate depreciation on pieces of the purchase that wouldn't usually be allocated out under normal circumstances. 

Purchased and in process of completing full gut rehab on neglected SFR.

Based on all the facts and circumstances, you participated in the activity on a regular, continuous, and substantial basis during the year.

Once water gets back on, I don't think it would be super difficult based on current circumstances

They rented the units to bad tenants, misallocated funds (including two months’ worth of rent), and prioritized unnecessary repairs while neglecting key structural issues.

Each building will have their own stipulations as @TomCasey mentioned, but the 32+ day rule may help to bypass them in certain circumstances.

Does anyone have any tips or advice for getting started in my current circumstances?

Quote from @Christine Cho: Yes, it was the penalty I paid for not being firm and not knowing what do to...it seems like alteration request being used as way to get more refund is not new issue, and until Airbnb fixes this hosts have to be aware and plan for the course of action and stick with it.Agreed with the above- unless there is an extenuating circumstance where the blame falls on you then you don't owe them anything.

Things were in dire shape due to neglected maintenance.