My question is, for my personal tax return, do I need to complete the Schedule E and/or Schedule C? Or

I still think that a waterfall structure is your best bet. One

I am confident the economy will be back, just not ready to bet on when.

And of course, Cap Rates depend mainly on the Class of the Facility (A, B, C, or F).  

@Elizabeth Enlow At the #s you've described: sub-$60K investment, 14% cap rate you are probably dealing with a C- or D type property. 

In a small town you may have a higher vacancy rate due to less demand, you may not get the kind of rental appreciation you can in a larger town (although you NEVER want to bet on appreciation).

I like to stick to C or better properties (starter homes, decent schools,  no crack being sold out of my rentals, etc.)I've analyzed commercial warehouse districts and again the rentals i have are by far a better deal as far as IRR go.

I like the fundamentals of Sacramento, but not sure how much I'd want to bet on cap rates continuing to go lower. 

I know that isn't true for B-, C, or D locations so the old adage of location, location, location still remains true.

So far it's feeling like I have to fudge the numbers to even get it close to break even as a rental, and I've heard plenty on the podcasts that it's not great to bet on appreciation, but Denver still seems like it has room to grow with all the people moving here - and I just want to make sure I look at all my options.