I spoke with someone who had a similar issue and proved that the property was being used as a 2 unit rental because they had a lease agreement in place and never discontinued use for more than 3 years since most recent rental license.With 3 units its a bit of a tougher battle.

Airbnb has insurance in place to help offset any guest issues.

The one issue is that you can only purchase real estate "Cash" in general as most lenders won't let IRA's take out loans, but I've seen it done if the deal is right.

In that scenario, Fannie/Freddie have a 15% down option (but see above about market conditions) but they still won't lend to an LLC.Now, I feel that transferring your property to your LLC after closing is a non-issue. 

I've seen that you do a good amount of cleaning them up before you stick a renter in there so perhaps the issue not so much the capex but the property management.Keep killing it! 

Why would anyone want to deal with tenants and all the issues? 

The issue is the property needs a good bit of work and I dont have the capital to do the repairs, like a roof replacement.

Or perhaps you are all experiencing similar issues?

I was just wondering if there are any issues that wouldn't allow me to make this deal because it is close to foreclosure.

@Steve WrightIf it is really a rental property, then capital improvements made to it (once it is a rental) are also deductible, but slowly via depreciation and not right away.The more important issue is whether you HAVE converted it to a rental property.