@Jose Castillo This is just a thought exercise at the moment for me, but let me walk through what I'm thinking.

They are a great if you do any commuting or while exercising.

If you have a responsible tenant that wants to save a little on rent, then they can do it and some are motivated to do so to save the money, I know I would be and enjoy the exercise.

Active participation simply refers to the amount of management oversight you exercise and serves as a qualifier for taking the net passive loss allowance.  

My take away from my time working with mortgage servicers is this- if you feel like your daily work life is an exercise in futility... get out.

If you do an exercise in "Values Clarification" it may help you find your passion and purpose.  

Seems to have much lower hoa and with a good community pool exercise area.

Unless you have behind the scenes info, the liklihood of a deal here isn't worth the time you're investing trying to figure it all out (unless you're just doing this for mental exercise that is).I suggest you come up with some sort of threshold/prelim test to filter out these type of situations and focus your time on properties that are more profitable and more likely to be sold at the price you need.Time is your most valuable asset.  

To get an idea of this without going through the brain damage of this exercise, are there others doing this in the area?

For some that appreciate the immediate exercise it isn't a big deal, but it does immediate limit my tenant base to those that can take stairs.