Under the IRS rules, a person  qualifies as a real estate professional if: (1) more than one-half of the personal services the taxpayer performs in trades or businesses during the tax year are in real property trades or businesses in which the taxpayer materially participates, AND.....(2) hours spent providing personal services in real property trades or businesses in which the taxpayer materially participates total more than 750 during the tax year.Like @Greg Scott and @Russell Brazil mentioned above, I don't believe that you would qualify as a REPS, but if you are going to try it, make sure you document it very well (i.e. with some kind of proof, like time cards, mileage forms, and/or receipts, etc.) so that just in case you do get audited, you at least have something to provide to the IRS agent. 

It does seem like the owner is less of a landlord and more of a glorified RA.If you can find the right tenants and live there as long as possible to make sure care is given to the space, I believe that will go along way.

Basement: If it's unfinished, it might be best to lock it off, use it for storage and cleaning supplies, and only provide access when guests need to use the washer and dryer.Size: 2/2 is enough space for most of the guest traffic there, especially if you can fit in a bunk bed.Well water: It's super common here.

I wrote a long piece a while back you might find helpful: https://www.biggerpockets.com/blog/due-diligence-ultimate-gu...Good luck!

>>Can you find your own maintenance techs to do the work if you don't like any of the quotes Hemlane provides? 

You're attempting to find a solution but haven't articulated the details of the problem.

It seems hard to find any property these days that will meet the 1% cash flow rule in the US, so financing at 6-7% and not cash flowing doesn't appeal to us as a strategy - but is there something we're missing here where we should definitely lever up?

I find agents who are also investors are the best guide for learning and developing a strategy to buy.

Find a way to get rid of shady tenant and keep the good one.

Antonia Noori Farzan recently wrote a wonderful article in the Providence Journal about rooming houses.