The cheap "cash flow on paper" Class C properties even if renovated will be a huge headache with repairs, tenant issues and won't appreciate enough to make up for my losses.  

@Kevin Luttrell oh, and I think the issue may be that since pretty much all accountants/preparers use a tax software, they follow whatever the software does.

See what issues they may have and how you can solve it.

Be advised, however, that we did NOT sue our former bank on the basis of discrimination but on issues related directly to their actions against us contrary to our loan agreement. 

Intra-tenant issues can be more since they live so close to one another.

When that happens there is NOTHING you can do in the short term to resolve those issues.

And is this an issue I should fix?

If so, then being an investor is technically non-public.

However, I am having issues finding a good area with good growth at a good price. 

They used different strategies: house hack in CA, STR, buy off market, buy OOS, SFH, multi-units, buy large apartment complex with other investors, etc.Thoughts on 1031 exchange to DSTs to try be more passive (no more dealing with PM, renovations, repairs,  tenant issues) but I've heard the money is trapped for 2 to 5 years depending on the operator, still researching DSTs.