Time and practice will still teach you as you do deals but it will help you understand what things costs for the size of the property 

Then if I have additional concerns I call in an expert to get further information and an estimate on what the repair will cost.

We offered 407 and asked for closing costs.

Again I cannot collect rent to justify this cost/effort.  

This gets you in the game with minimal upfront costs.Covering the Smaller Costs (Inspections, Appraisals, Earnest Money, etc.)Even when using other people’s money, you’ll need some cash for earnest money deposits, inspections, and carrying costs.

That's your cost. 

More like a 101 of taxation: you had a reserve of losses -> it helps when you have profits.And a tax geek addendum:I also do not see a direct link to cost segregation benefits here.

@Jonathan SniderFannie and Freddie do have LLPA's and the lower the down payment, the higher the cost.

Sub2 is a risky strategy for a long term buy and hold as the longer the deal structure stays in place, the higher the chance that issues will arise (like issues with the loan servicer, insurance, seller filing for bankruptcy, seller dying, seller realizing their DTI ratio and ability to buy their next property is negatively effected and becoming upset about it like in your case, due on sale clause being called, etc.).

@Jay HinrichsI try to avoid historic districts at all costs.