The only rental claim I had a tenant submit for renters insurance was denied (condo flooded due to an exterior patio drain backing up) and they felt that damaged was not their liability. 

You pay ordinary income tax/self employment tax on it.

I'm sorry to hear that no agents responded to you here in Colorado, that seems a bit out of the ordinary.

Recommendations include moving the patio away from the house and adding a retaining wall.Other considerations:I already have a team in place locally to manage the property and handle repairsI visit the area biannuallyThere’s another couple interested in the property and supposedly making an offer.I haven’t secured preapproval for a loan yetMy credit union only services Oregon/Washington, so I can’t use them for a loanI’m unsure about the process of buying an investment property from out of state, as a first time home buyer, especially since I don’t plan to live in the property myselfWhat I’d like to know:Does this seem like a solid investment opportunity?

Hi Eva, I am in San Jose, but I probably spend half of my time helping clients in the Oakland area, as well as I was born and raised in the East Bay.If you go to meetup.com you can look up the events that are already in your area.Here are a couple:THE BARSTOOL INVESTORThe David Greene Team NorCal - Real Estate Networking Event, Wednesday, March 15 · 6–8 PM - Calicraft Brewing | Outdoor Patio Tables 2700 Mitchell Dr, Walnut Creek, CA 94598Hope this helps. 

1. you could structure it as interest only, and the lender would pay ordinary income tax rate on the interest paid. even if interest rate was 0% they would still pay around 4% (FAR rate) in taxes.2.

The IRS allows expenses that are ordinary and necessary to be deducted.

If 1.5 is out of the ordinary for your area then I’d go with your local norm.

Stains are not "ordinary" and should be charged.

Active = Income earned from Material Participation.Whether that's SMB, W-2, contract income, or prof real estate.This is income where ordinary tax is paid and losses offset other income.