The a/c unit went out in one of my  studio units and the replacement is on back order. 

However owning rentals in a C Corp or S Corp. is generally not the best for tax considerations. 

Deals in my market have been trash lately, but I’m trying to scale the right way without forcing anything.If you were in my position today, would you:(A) keep stacking cash and wait for softer deals,(B) pull equity and buy now, or(C) use your “listing-agent/low-contingency” strategy to grab deals even in a tight market?

Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”Key metrics for each Property Class:Class A Properties:Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.Tenant Default: 0-5% probability of eviction or early lease termination.Section 8: Class A rents are too high and won’t be approved.Vacancies: 5-10%, depending on market conditions.Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Class B Properties:Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.Tenant Default: 5-10% probability of eviction or early lease termination.Vacancies: 10-15%, depending on market conditions.Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.Section 8: Class B rents are usually too high for the Section 8 program.Class C Properties:Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years.

So to hit a 9%+ CoC return, you must either:a) increase annual cash flow, b) reduce your cash to close, or c) both.Think about Columbus, OH (appreciation-driven) versus Cleveland, OH (cash-flow-driven).

Now we're seeing investors pouring money into buying Class C rentals - but, many are getting burned.In our experience & opinion, the main determinant of property Class is not location or even property condition, those are #2 and #3.

If you apply Class A assumptions to a Class C or D property - disaster!

Even though everything’s new and should be low-maintenance for a while, someone will eventually clog a drain, break something, or have an A/C issue.

Starting with B and C grade areas lets you get hands-on experience, build cash flow, and gain confidence before exploring syndications or larger passive deals.

If anything, consider a single member llc (that flows to Schedule C) and try to match the income with the expenses.