We initially allowed investors to manage these properties themselves and ran into a lot of issues that affected the integrity of the neighborhood which then affected the other investors and their assets. 

Both units are approximately 400 sqft, "yurt-style" cabins with large decks.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

Then gloat about how much they made on the exit meanwhile dragging the neighborhood property values and increasing crime the entire time.

.- Stick to B and C+ Areas: These neighborhoods balance affordability and tenant quality, minimizing risk.- Analyze Properties Remotely: Use tools like BiggerPockets calculators to evaluate deals.

I doubt you'll find a MF that you can get into for 40-45k that will give a similar return that isn't in a terrible neighborhood.

I think the biggest mistake that people make, is thinking that investing in STR´s is some totally different style of real estate. 

I'm looking at Class B properties in up-and-coming neighborhoods and plan to self-manage once I relocate.  

I agree.. just look at any large mid west or rust belt metro.. there is a ton of houses avaliable the question though will folks buy in certain neighborhoods where inventory is readily avaliable you can buy existing in many of these markets for far less than new builds.. so to me its really a neighborhood issue  a school issue a crime issue etc etc..

Due to increased rates i did not refi so i did not get opportunity to see how an appraiser valued the half bathroom but the comps with same bathroom count had crazy valuation for the additional half bathroom.Taking under utilized space like a work area to add a br where the added br does not put you above the normal for the area can add value.Similar if a neighborhood is virtually all 3 br and 4 br properties and you find a 2 BR, it could be a value add to add the bedroom via new construction.