Having the bare minimum can be okay but it also puts them in danger if something should cost the HOA and when that account goes to zero or under 10% they generally raise the HOA fee's.

@Marcus Welson I am not a CPA nor accountant but i think it is pretty clear as already said you can't deduct a loss of more than you Basis (cost) to acquire the asset. 

I would also consult with a certified cost segregation specialist in terms of classifying other assets into their appropriate class lives.

I realize this will include 2 closing costs, but would be more to hold and pay interest on hard money loan.

While it’s not Upstate NY, if you’re ever curious about diversifying or want to compare strategies, I’d be happy to chat.Best of luck with your decision, and feel free to reach out if you’d like to discuss further!

But, if the cost is fairly nominal, maybe under a couple grand, and you have no experience in real estate, including owning your own home and hiring contractors for that, then it is likely worth it.I would always start with a deep assessment of where you feel you don't have adequate knowledge.  

Managing tenants comes with its own challenges, but it's definitely a viable option to get started in real estate.Wishing you the best on your journey, and feel free to reach out if you ever want to chat more about it!

Second, it could free up a lot of time.I recently converted my STR to LTR.

In this case, the benefits of cost segregation can be significantly higher than under Option 1.

Have you estimated the repair costs?