I am changing the locks over on all of my units at each turnover.

Try to dispassionately evaluate every opportunity with a goal of maximizing after-tax returns net of risk in line with your own goals and tolerances.  

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.

Is there debt on the property or are you doing all cash?

Determine the price that attracts the investor, stop the bleeding and and move on.

I am looking to purchase real estate for both investment purpose as well as to offset as much tax liability as possible.  Is my thinking correct that homes in highly appreciated areas won't benefit as much from Cost S...

., mortgage interest, taxes, repairs, depreciation) on Schedule E starting when the property is placed in service.

It depends on who you're hiring but that seems fairly standard.  

There are a lot of market-specific issues you'll have to grapple with and also, there are plenty of landmines in MFR on its own in CT that you'll have to be ready for, in addition to the nuances and complexities of developing something like this.

I will post it on this thread.