Mentioned a great point, the tax consequence of a sale will bring property tax up to date based off the sale and the last time it was accessed was when the park was built in 1938 so I’ll be facing a huge unknown there as well so all in all I think the “F” factor is way to high with no upside that I can see.

I have no skills currently in the home renovation department, interior design, etc.

I think a lot of the Little Village houses were designed just like this.

@Greg KendallThe Capital Gain will be your selling price minus your basis.Your basis = purchase price PLUS capitalized costs (which would include many of the costs incurred to get the property to "in-service" condition...loan origination costs, closings costs) MINUS depreciation taken.And you are correct- the amount you owe is not factored in, although certain loan costs and interest can be either capitalized or expensed.Also @Andrew Reyes brings up a great point- if you intended to sell this property after you had rehabbed and placed a tenant, you may be seen as a flipper and the gain could be taxed as ordinary income.Andrew also mentioned that holding for 2-years will help.

Some people must be getting eaten alive by their vacancies that they themselves have designed.

Hi Cody, so I went to to get my degree in mechanical engineering also, then changed to mechanical engineering technology, machine design. and got my design and drafting degree. 

Another key factor to consider is whether any of the market has a good property manager since I invest out of state. 

If this is a class C property then make your office class B in terms of furniture, design, and amenities. 

With residential rentals, long term vacancy should not be a factor. 

I know that the equity is the most important factor, but if the ROI is great, and the purpose of the Sub 2 is a long term buy and hold strategy shouldn't that make the formula more flexible, since the equity would build faster with a higher ROI?