@Chris Seveney -  on your historical K1 look to see if you had a positive or negative. usually the first year is when they would do the cost seg and you'll see a large loss.

If you have a large down payment (or the ability to cover negative cashflow), the East Bay's appreciation and principal pay-down benefits have been historically very strong compared to other markets.  

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

Historically an excellent place to start your mortgage search for 5-20+ unit properties is a local credit union.

Alternatively, you could also just apply a % annual appreciation based on historic data, but those typically won't give you the most accurate market data since they're averaged out across all/most property classes (e.g. a single family home may appreciate differently in your area than a mobile or multifam property, etc.) 

I have seen many a gorgeous historic home in fine condition be assaulted and battered in this manner in the more chic and expensive areas near me, and it is something done usually by a contractor who has no architectural literacy about these styles.

Historically, real estate appreciates 3% - 4% annually.It may be possible, that an area like Austin will appreciate more.Austin, TX, from my understanding had many years of crazy appreciation and recent years of negative appreciation.There are also a lot of reports that Austin, TX has a lot of new rental supply that came and is coming into the market.What is your required return from an investment?

With regards to "red tape" I'll tell you that the week after we closed on our property we received a letter from the historical society welcoming us as new owners, but they also informed us that any work done to the exterior needs to be approved by them first.

In our historical town, agreements were often informal and not well-documented until the county began proper recording in the 1980s.Despite extensive record searches, we haven't found a defined easement.

It is a 4bed 3bath 3200sqft $1.2m custom homeBenefits- no HOA or rules restricting STR -1mile (walkable) from historic downtown or from the Rock park-house has nice views and is pretty secluded from neighbors and feels private-assumable loan with much lower than market paymentDraw backs- high price -no comps, new house in older neighborhood.