The challenge is that your capital gain significantly exceeds the $250,000.00 (or $500,000.00) tax-free exclusion permitted under the 121 exclusion, and if you sell your property the amount of capital gain that exceeds the 121 exclusion limitation would be painfully taxable.

Ryan Dossey  this is the exact reason these homes go through this cycle. you have  a new investor buying in a very challenging area.. the success rate for more than 36 months is no more than 50/50 ... if you want to see what your urban core rental will look like in 3 to 5 years.. well your looking at it when you buy it and it needs major reno... in my mind this is the province for very experienced landlords that have hundreds of these..

I say I am sure your not the type that would let some stranger dictate what you do or buy... ( most common response is your damn right I would not) so they are ready for the offending neighbor.Then if I am there and the neighbor try's that BS I say well not sure what your talking about if its so bad why do you live here in the first place. that shuts them up.And if all else fails I tell the neighbor I may just rent this out to a half way house that specilize's in letting drug offenders and other felones get a second chance so its up to them do they want a nice new neighbor or would they prefer the felons.. since they will pay me double the rent.. you just have to be in their face

A lot of new faces here on BP.

I'd love to hear the challenges you face selecting tenants.

You've come to the right place to get your questions answered and to connect with other investors.There is a Portland meet and greet for BP members next Tuesday in Lake Oswego, if you're available, try to make it out there to meet other members face-to-face.There are also a couple of real estate investment groups that may be of interest to you, both Northwest REIA and Rarebird hold multiple monthly meetings attended by many local investors.

Nothing beats a phone call or a face-to-face meeting.Property Manager in Killeen:I use JWC as my property manager (>1-year).  

We, together, are learning, making money, and building a great network of workers to get us through the present and help us build the future.Bottom-line: I think you need “pleasant nightmares” to grow, expand, challenge yourself, and ultimately create what you envision.

Milwaukee has a monthly BP meetup the last Saturday of each month coordinated by @Nicole Pettis which is a great way to meet others in area and put names to faces.

Therein lies one of my challenges.