This is due to poor origination and having limited exit opportunities.  

The main drawback is limited track record—the sponsors started in 2019 and have less than 10 years of direct real estate experience, with backgrounds in non-RE fields prior.Based on this, my current criteria for sponsors I’d consider investing with are:Focus on 1–2 regionsFocus on one asset classHave 10+ years of direct real estate investing experiencePrimarily dedicated to running investments (vs. running podcasts/courses/events)Appropriate amount of capital raised / projects going on in a given year.My question to the community:Are these the right criteria to evaluate sponsors, or am I missing key factors?

Each comes with tradeoffs.For example, an S-Corp may reduce self-employment tax, but you could lose out on certain deductions like the QBI deduction if you hit the phaseout limit .

And note also that some states may have laws limiting residential leases to one year - but that doesn't mean you can't renew your tenants for an additional year.

I cannot look for 250k and above properties because that would be my limit. 

Seems like most are within the city limits where the population is more dense.

The key is to have the right contractors and plan it strategically to limit your exposure to construction dust.

I am really interested in it, however not sure where or how to start with fairly limited resources.

@JD Martin, I hear you, but the restrictions over here are really limited to Asheville, and really only to about 2/3 of Asheville, and then Woodfin on the northern border of Asheville, which is quite small.

The IRS rules limit deferral strategies here since the home won’t be used as a rental.This post does not create a CPA-Client relationship.