Since being there we have done many improvements and a lot of repairs.

Of course you can do what you want, but there's a good chance it will not go as planned, and either you or the tenant will not be happy.If those decks are due for a refinish, and the refinishing is pretty easy, who don't you send a handyman over there to do it, or go over there yourself if you're a more active sort of landlord?

I assume I use form 4562 to report the start of depreciation of these capital improvements.

How can I improve my credit enough so the banks feel comfortable about giving me a loan.

It sounds like there is absolutely ZERO chance this will not be a huge problem for your PM. 

That tends to be the only tenant who will stay to term.Also, being in Ohio (winters) we will offer oddball leases to get the future leasing period back on track to always be leased in spring/summer.Right now (Feb) we are doing many 15-18mo leases so when they do vacate we're leasing back up in May-Sep.Some people like 1yr leases so they aren't stuck with a "problem/annoying" tenant as long and have the chance to cancel at 1yr vs being stuck with them 2yrs.  

Will it happen, probably not, but the chances of you getting sued and needing the LLC are probably slim also. 

I don't know that there's the same chances of appreciation as in the northern parts of South LA, but it seems like the cap rates in Compton and Lywnood are better than elsewhere, and there are some deals available if you are willing to do some rehab.

You DO NOT want to chance letting a bad tenant in.

My question is would it be a bad move to purchase a home and rent it out while we wait for the neighborhood to improve?