It also affects what our proceeds were for that year , so we likely have to file and amended return.Can there be an arguement of fraud in this type of situation 

You don't part with any money when you produce POF.

In January of 2014 he filed an annual report and paid his annual fees.

As long as it is a single member LLC you can just file it as a part of your personal taxesAll the best!

It's not often that a low producing property recovers that much.  

The property owners IN MASS burnt down their properties, which, since they did not file insurance claims was actually the only LEGAL way to free themselves of the continuing negative cash flow of these buildings.  

SFR will initially produce zero income (unless you rent rooms or until you move out.)typically investors that consistently buy multiple homes a year are experienced in the REI game with lots of connections and access to cash. not always. but more often than nothappy to discuss your investing goals more

One theory is that the investors see population increasing in these areas and are willing to deal with the ridiculous local laws This actually isn’t even necessary true, the placest with the biggest per capita housing production or “investment” is in the sunbelt, the expensive cities produce a shockingly low amount of housing, obviously zoning laws play a huge role in that as well, but even when you looking up institutional investment in existing properties it’s mostly in the sunbelt, most people who own big buildings in hcol areas just bought them decades ago when they were much cheaper, even D.C. has has like a 4-5 fold increase in value in some areas in the last 15 or so years.

The property produced $48K gross over the past year.  

You are going to be thousands in the whole before you ever start and any cashflow you get from a rental will be eaten up in tax and corporate filings.