How would you classify yourself in terms of risk tolerance?  

@Christopher Throop were classified as commercial instead of residential the real estate taxes would be $2,758.55 instead of $744.50!

I'll try to explain the various levels of participation and how you can take passive losses against ordinary income.Under Section 469, an activity is classified as passive if the activity is a trade or business activity in which the taxpayer does not materially participate during the year or a rental activity.Section 469(i)(1) permits certain taxpayers who actively participate in rental real estate activity to deduct up to $25,000 of losses arising from the rental real estate activity, if the taxpayer cannot meet the material participation test required to be categorized as a real estate professional.The $25,000 permitted loss is reduced by 50% of the taxpayer's adjusted gross income (AGI) in excess of $100,000.

I just checked the classifieds and found the going rate for two beds in that area to be about 650 to 670, so we may not be getting as much rent as we should be.

This is a 3,000sqft medical facility that would be classified as Class A office space, I believe.

Account Closed if you want to acquire properties check www.realtor.com, classifieds, drive around looking for vacant homes, and find the owner.  

I would assume the improvements would be classified as "Home Improvements" and be deductible similarly to how home improvements are deducted for a home office.

Compared to other parts of West Philly, I would classify this location as C.

I'm curious if this is one or both of the following reasons 1) real estate as a whole has heated up and valuations are becoming less attractive 2) I'm too conservative with my repair, capex, and other estimates.Rent - $1,020 per side * 2 = $2,040 per monthP&I - assume 4.5% 30 year with 25% down - $760 per monthTaxes - $317 per monthInsurance - $83 per monthVacancy ($1,530 per year or $128 per month)Prop Mgmt - I would be the landlord to start.Repairs - $50 per monthCapex - $200 per monthOther expenses - water $42 per monthCash investment - $50K downpayment + $10K repairs + $2.5K closing = $62.5K cash investmentI come up with 8.9% cash on cash or 7.3% cap rate.I would classify the area as B with prices of $90 - $110 per sq ft on similar properties in the area. 

It shows what the dwelling is classified as for tax purposes only.