My main goal with the post as always was to promote confidence and offer some insight to those who many not see rates every day.One thing for certain as rates continue to drop there will be larger number of new buyers putting in bids.

You could start there when it comes to finding out more about build quality and the types of materials used in the homes. 

How do people who acquire and manage STR's track the time for their Active Material Participation activities? 

We had to replace all the plumbing ($3400 in materials), we did all the work.

(Littleton, where OP is buying, is an example of this.)So as long as you work with an agent who knows the laws in and out (ahem, blatant self-promotion), and you buy in an area that currently allows non-owner occupied, you almost certain to be allowed to do so in perpetuity.

@Usman Khan Yes, you can apply the short-term rental tax loophole to the STR units (80%) in your triplex if you meet the material participation requirements and have average stays of less than 7 days.

I am doing this completely remotely, which has been a massive pain/lesson learned (topic for another day).I signed a very high-level agreement (i.e. expectations simply say "drywall and paint") with him for drywall and paint work at my home for a total of $10KI have paid $5K as a down payment as well as ~$2K in materials over time, as neededThere have been multiple break-in's in the home, and he has done me favors of working with the police, and boarding things up.

@Timothy Blackman Tax sales, whether tax deeds or tax liens, are no where near as easy as the prople promoting them imply.

Inflation: While real estate is often seen as a hedge against inflation, the rapid increase in costs for materials and labor has made new developments and renovations more expensive, squeezing profit margins.3.

Smaller properties are cheaper to update or can use higher quality materials.