Assuming 7.5% interest rate, the negative leverage would require you to put way more than 20% down just to break even.  

Looks like a good service but they seem to require a minimum of a 100 doors?

@David RobertSevere nicotine damage can require extensive cleaning, sealing, and even replacing drywall or HVAC ductwork.

The real prohibitive costs come from the legal, compliance, and reporting requirements of registering a security.

(example)A 3115 will be required to claimed the missed depreciation.

As investors we want to maximize revenue but to your point that still requires applying common sense and basic ethical principles.

I've found an off-market property that would require $175k purchase, $35k down, $20k in repairs, with a conservative ARV of $235k. 

Another option that requires more legwork is to call the servicer/ producer of the inverter.

Will the title company put this property under our LLC name, and won’t be required to legally inform HUD/tax authorities. - will it influence property taxes once we move to conventional loan in 3 yrs? 

Also your permitting process, type or land, grade of land, if underpinning is required will all play a factor into your cost.