I've found a lot of newer people will be more accepted in the Multi Family world because it's a team sport and if you can bring value to a team who does syndication or a 506(C) or (B) raise you can learn a lot and its quite lucrative. 

You can’t ever bet on a property appreciating.

Does anyone expect to find a class C or B home for under 65K that wont have a huge cap ex?

There is no "Popular Guru" teaching lease-option to buy programs where the transactions will be compliant as intended meeting new accounting requirements (by everyone in business) and/or the IRS Code, they don't event touch the subject matter I'd bet on it. 

My wife a I are buying our first rental property and I am trying to figure out how to file our taxes. We will transfer the property to an llc. We live an the property is in co which is a marital property state and the...

Just a technical point--if the property is owned by a C- or S-Corp, but the loan is in your name (as owner of the corporation), the name of the owner of the corporation, then the property is counted against the limit.  

They are usually done by a block method using square feet, they don't have time to look at each property so if you bet on that value, you'll be wrong, it's apples and oranges.If you don't know what value is based on and the 3 approaches used, you're not even in real estate, you might be playing some guru game playing house like a 5 year old girl, just trying to play with bigger houses.

BP'ers refer to this strategy as "house hacking".You're young, so you have time to bet on San Diego appreciation over the next 20-30 years.  

Ryan Shaw , I'd bet on a bad control board.

Now if you are renting section 8 I might have a different opinion of this, but I find anything C+ or better you should have them in at least the master bedroom and living room.