And while, generally speaking, there is not much practical gap between 27.5 and 39-yr depreciation schedules for a small property, the distinction is nevertheless significant due to the special rules afforded to non-residential properties, such as expensing of roofs and HVAC.Yes, there's this concept that the property's character is determined at the building level.

You will also not have the luxury of spreading major CAPEX expenses and some maintenance expenses across all units (one roof, one electrical system, one lawn, one parking lot, one HVAC system, etc)- When you buy the portfolio, there is a pretty good chance that at some point you will want to sell off the lower-performing assets in the portfolio or the assets that cause a headache.

The first floor needs some updating but the upstairs needs to be gutted because they had a roof leak years ago.  

If it is a low budget house roofs still cost 10k+ and everything else.

This was my first large project that included an addition of 900 sqft and a 2 car garage, all new electrical, plumbing, roof.

How new are the roof, HVAC, Electrical that you only budgeted 5% for these?

I will have all new plumbing installed, roof, kitchens, bathrooms, create laundry rooms for every unit, and cosmetically enhance the place both inside and out.

Purchase price: $270,000 Cash invested: $60,000 2nds property is a fixer upper which will require new flooring, paint, teardown of bathrooms upstairs and kitchen due to water damage as well as roof and siding down the line.

You need to know who is sharing a roof with you.Payne - I'm happy to connect with you if you have specific questions about your situation in Upstate NY as well as processes/systems to put in place as you begin your career as a landlord. 

Missing shingles in the roof- Is this something a handy man can fix?