I almost typed "independently" but there is a nuance stopping me from that, the very issue we're discussing.If the two of you do not have other STRs, as seems to be the case, you only have this one STR to draw the required hours from. 3 material participation tests to try:1.

It sounds like you'll be improving on top of a ground lease issued by the municipality. 

Just started cold calling with VA's a couple of days ago and we've run into one of our first major issues.

I'm not sure competition was the problem for you - sounds like it was more an issue of marketing and managing the lease up process.

I would talk to your lender - there might be state specific issues but I know alot of folks (myself included) that bought only in one name.

Main issue with house is the amount of mess left behind.

We've contacted Zillow for assistance, but the issue has not been resolved yet.Has anyone encountered a similar situation or have any advice on how to proceed?

The main issue with Pasadena is the high price of entry and long timelines for Building and safety permits. 

If your having issues getting a duplex to work have you tried a 4 unit? 

The issue comes with financing the rehab:Another loan and then cash-out refi?