Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

Then, at death, the property’s basis resets, effectively erasing the accumulated depreciation.

But don't discount a deal killer as negative when they only work in your best interests.

Even then its often more cost effective to work more with what you have. 

@Wiley Hood DIY cost segregation tools like KBKG can be cost-effective for simple properties, but they lack the precision and audit defense of professional studies.

I haven't seen any statistics to this effect and I don't think any has necessarily been compiled but I bet I wouldn't exaggerate if I state that 95% of the value of real estate in Southern Spain or at least the province of Andalucia is in the Costa del Sol.

There are many reasons that adding a single ADU in southern CA is a less than ideal RE investment (i will post a list at the end) but the negative initial equity is a primary reason as the initial negative equity position consumes the initial cash flow and can take many years to recover.As for converting your home to a rental….

But there are just as many who won't...don't get stuck in the negative.   

It's been less of an issue with my first two properties which cashflow at 3% interest rates, but the latest unit is cash flow negative on a 7% interest rate.

I’ve seen many investor clients use 1031 exchanges effectively.. just be sure to get specialized tax advice.