As the tax code is concerned all of the costs to create your rental property business (buying it and making it usable for it's intended use) and one in the same. 

That's awesome yall are assisting with lending!

Your ultimate goal is to create a “Win-Win” Situation, for you and the seller.

What I said in an earlier comment about "section 179 can't be used to create a business loss", that wasn't entirely accurate/complete. 

When you said  "New Construction" I was assuming, wrongly" that you meant buying a newly constructed home and perhaps thinking you were getting some kind of bargain that created equity. 

Do my 3 associates need to create a LLC to be able to do these renovations or can any individual do them, as long as proper permits are pulled? 

Use DIY tools for straightforward cases but consider professional help for maximum savings and audit protection.This post does not create a CPA-Client relationship.

We have offered to allow her to pay a reduced rent for the first few months as well but I am worried that may create some sort of limit on how much we can raise the rent on her in the future.

So if the LP's have enough cash they simply pay the loan off and own it free and clear.. but the size of the deals are so large raising cash to pay off debt simply is not realistic at all so if the property goes into default your junior position investors find themselves wiped out.Further more thats why a debt fund like Chris has can be a good choice for the very conservative investor..

Starting with single-family and small multi-family properties is a smart choice, especially out of state.