When I run the numbers at 40% vacancy it looks like a bad investment, at 30% a decent investment and at 20% a great investment.

How many of us have made bad decisions and lost money, yet we always call it a "price of education".

Let's also assume this plays out across several properties, so we can safely utilize a market cap rate of 7%.Assuming your building is identical in terms of unit size, quality, location, etc - You have 14 units with market rent of $1k/mo ($168k/yr PGI). 

I contact them, preferably face-to-face, and tell them "bad behavior" is not a protected class and we will not consider them for any of our rentals.

She had such bad memories of it, she didn't care how much it sold for, as long as she at least broke even.

Kept it recorded and crossed my fingers....6 years later they got their life together and wanted to clear the judgement...lucky me...What I learned after all these years is not keep bad people out of my nice homes.   

Find a good agent, some let's just say suck really bad at understanding the scope of repairs. 

As for buy and hold, you’ll buy at a discount and the concern will be the quality/completeness of the remediation, which is almost impossible to verify..

To some extent I'm also looking for a new primary residence on acreage so that I have a higher quality of life (no awful neighbors). 

For context, this place and the other calc I posted in another thread are in a very desirable, residential area next to an Ivy league school and all the grad school- the tenants (I was one a few years ago) are very high quality, its largely grad school/professor/staff rentals, and the home values historically have been largely immune to changes in the housing market- and probably as such, they've gotten really expensive.