Hey Daniel,I use out of state property management teams and we use that same screening method you're currently using.

The Chinese have lots of methods to cause problems. 

Hopefully this will clear things up:You are correct with your understanding that you can't write off any costs related to inventory (the house) - whether that be the cost of the house, or items to improve the inventory (like lumber, paint, contractors, other flipping expenses).However, if the cost does not relate to the purchase or improvement of inventory (the house), it can be written off as operating costs, as you noted.

Aaron is correct about investing in other areas that are local that are outside of Port Arthur proper.

I just finished listening to @Jay Hinrichs BP podcast and liked his method of being a Capitol Partner. 

It looks like you’ve done everything correctly, as long as the locks were changed at or after the eviction as specified when the Writ of Possession was served.

However, I will be investing in multi-families soon and would like to apply this same accounting method for the properties as well.

@Ellie Narie all the posts above are correct and your title company that you use to close on the property can help file the lien properly for you. 

You may need to amend your tax return if you already filed it but this issue should not be difficult to correct. 

Are you sure the neighborhood you are looking at has correct zoning for ADUs?