It is always a good idea to call the city before purchasing a burned home to inquire about the necessary permits and regulations for renovation.

But you can still treat it as resulting in Ordinary Income even though it is reported on Schedule E, which lets you properly report in accordance with the tax results it seems you are shooting for under the tax return loophole.If your CPA is looking at switching it between schedules to get that tax result...it sounds like they don't understand the reporting position fully and/or they just don't know how to use their own software to address it.In summary, based on what you are describing for the situation, it should go on Schedule E, with what sounds like the resulting refund of $17k.

To give an idea of what my current numbers are with my other two Airbnb properties, they are both 5 bedroom 3 bathroom.

Am I thinking about it properly?

:) As an investor, you have to have not 1 way of getting properties, not 2 ways… but more like 10 to 20 ways of getting off market homes (or better yet.. good deals). and keep in mind, that I am a realtor :) The name of the game is "options" You do want to have a great Realtor that you can bounce ideas and comps off of.

Keeping interest below the cap rate by 1.5-2 points sounds like a great idea!

And as I said in a previous post, you may have to go back multiple years to find new builds in the urban area and compare them to resales and see if you can estimate a value difference.There is no easy way to do this in that complex situation and many appraisers, IMO, are not skilled or educated enough to do that type of deep-dive analysis, and/or do not get paid enough (in the current appraisal climate) in order to take the proper time and use the proper tools to do what's required.

Thank you for the idea.

am in the cleaning and restoration industry.ozone and chlorine dioxide and many other suggestions here might work but the most important thing is that you have to treat the source for it to work.A professional grade black light could have helped you find the source easier before your contractor painted and installed new flooring.If it is very strong odor  the proper way to do it is find source,treat,clean everything and then chlorine dioxide or ozone.

Any ideas on best method to market in Detroit area?