I would gander that rentals that target the more affluent have lower default/eviction rates than rentals that target the average joe.

Or, should I take the initial purchase price, somehow subtract a fair value for the building BEFORE the rehab (let's say $200,000), and then add the labor and material that went into the project (approx $500,000) giving me a building value of $700,000 to depreciate?

When it comes to rehabing which cost more Labor or Materials?

My friends wont get paid for labor until I sell the house.

It seems pretty crazy to me, but it looks like now would be a good time to get into something since I want to hold on to it for a while.Thanks,Joe

I'm not gonna call all LL's faultless, and no they're not all reasonable, but-guess who's stuck with a second person they never leased to because Joe's girlfriend was "spending the night" a few nights a week, they had a fight and now Joe's gone, and your left with his unemployed girlfriend you never rented to but you now have to evict....or Joe bought a pitbull without asking his landlord....the pit doesn't pee all over the rug, but he bites the next door neighbors 4 yr old, and guess who'll be getting sued for that one?

Just watch those Judge Joe Brown episodes where two relatives never want to talk to each other and are now suing each other over a small loan.

SFOs that are going to be used as model homes for the purpose of selling the rest of the property to joe homebuyer (lease-backs).We're already going in on the deal, but what do you all say regarding market conditions over there?

Rather that let Joe Shmoe come in and make such a big chunk of change.

The labor is much more important.