Most likely going to be a C / section 8? 

If I see a guest drop the A/C down to 60 degrees, I do bring it back up.

They are at least in good location ( C+ or above).But if underlying is something like office class C made in 1970s, I dont know what to say man, the risk is with you....

Our primary defense against this in C-class housing is to rely on deadbolts for entry doors. 

Make sure to hire an attorney to review both the A to B contract and the B to C contract.

Unless with this caveat It was going to be my Business focus and I was going to become very good at it and do it basically full time.Exact same thoughts I have for owning C and D class rentals one needs to jump in with both feet to be successful at that arm chair investing in these asset class's leads to a lot of lost money.

@Scott ChampionRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a Class A property in Class D area, what quality of tenant will you get?

But still it is illegal i think b/c of the door or maybe ceiling height.  

Here's some other copy & paste advice you might find useful:---------------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a Class A property in Class D area, what quality of tenant will you get?

Section 469(c)(7) provides an exception that allows qualifying taxpayers to treat rental real estate activities as nonpassive, enabling them to deduct losses against other types of income.