Buying a unit or units that already operate relatively well as a str with the plan of improving the looks of the units in order to decrease vacancy and up the nightly rate is a great way to add value and increase the cash flow.

Hi Kenya, My first initial thought is that it is reasonable if it decreases your monthly living expenses and allows you to save for another REI or other investments - especially if it cash flows once you move out.

I'm assuming because foreclosure inventory has been decreasing so quickly, and i personally know a few agents that are extremely busy.What exactly is going on with the mortgage industry?

Looking for areas to avoid,  Hot/trendy areas,  rents increasing/decreasing overall, other market trends, etc...

As for DIY vs. having it installed by a professional, depending on your handy skills I would probably hire a company to have it done properly - they will know how to flash/caulk/paint everything that otherwise might get missed causing a decreased life span of the products.

We still UW 8% pref but I am hearing other operators decrease this to 7% or 6%. 

Due to me focusing on decreasing my bad debts, I will have to present this opportunity to a partner who has the financing.

The fact that the property is in the floodplain decreases it's value significantly. 

It's absurd and small minded to argue that short term rentals (notice I didn't say "airbnb") decrease property value.

To get such a property to cash flow, you can push the numbers in different directions by decreasing the price you pay initially (buy distressed, value-add, maybe off market), increasing rents (if currently below market or by improving the units), or by reducing expenses.