If a tenant is regularly late on payments, there is a very high probability that they will eventually stop paying or violate the lease in other ways that cost you far more than the late fees you see as "extra income."

The risk is very high when you are brand spanking new and you will definitely need to go through some transactions to get an idea of what you are doing. 

Active Market High and/or consistent transaction volume.

We own our primary, own a STR internationally, 3 commercial buildings, and a 4-unit apartment building - so we are highly familiar with real estate but here's a new conundrum.

Hey looking for multifamily 20k down cash flow 200 - 300k a month c class neighborhood high rent growth potential  

I also have 11 other LTR doors in the city (also do extremely well).If you have a high capacity to save more capital you could do BRRRR's in Detroit.

@Benjamin WeinhartMy experience on this tax forum tells me that highly technical discussions of the Code/Regs nuances are not well suited for this platform.That said, my 2 cents is that this issue is a matter of interpretation.

I would say the cost if it does become an issue could be high but that is a call you have to make. 

That's a ridiculously high insurance premium. 

I would also highly recommend you educate yourself on New York State tenant/landlord law, especially if you plan on self-managing.