I believe the main issue is 2 fold: 1.

Quote from @Ian Ippolito: Quote from @Michael Plaks: Quote from @Ian Ippolito: Quote from @Rud Sev: 3) Unless you're doing a 1031 exchange  at the end or similar tax structure to defer taxes, you will have to *pay back* all that depreciation benefit at the end (on sale...which for you is in 5 years)  via depreciation recapture.

Alternatively, do the risks outweigh the benefits of $500+ cashflow plus 30% day one equity and less than 2k out of pocket?

We are actually thinking about moving into the smaller unit. we are thinking if we should rent the main unit for long term rental or STR like airbnb but im afraid with airbnb, the non occupied days we may miss out on cash if its not rented out. 

Than I thought it was all the things that could go wrong in the flip, hidden gems like K&T hidden in the walls, shot main-lines, etc.....   

Bathrooms if you can zero threshold people love those and as they age out they need it anyway but that would be for main level. 

Real estate's "gross rent multiplier" is Wall Street's "sales to revenue",  "cap rate" is roughly "P/E ratio".When evaluating markets and investments I tend to start with GRM (or lazily the 1% rule), then attempt to return a cap rate based on assumptions about costs, then I work my way to multiple years of projections (assumptions about inflation, amortization, tax benefits, etc), and if I am partnering with one of my smart friends I have to pull up an IRR (internal rate of return).I also look at regional employment levels, median income to rent ratio in the zip code etc. 

So, I've got a difficult tenant.The main point is that he hasn't paid rent since September. 

But tax benefit of MTR if there is difference between the 2 vehicle.

(and depreciation & other tax benefits 🙂)