Lenders have bond and liquidity requirements and audit requirements which are different from state to state.

Electric rates vary, but around here, electric and oil are the two highest heat sources.An energy audit might point out possible upgrades to the property to save on utility costs.And while the utility bill is the tenants responsibility, I have found that lower utility bills make the tenants stay longer.  

Yes, I'd surely get audited eventually.

Is usage info tracked and available for audit purposes?

And when I loan, I prefer a strictly debt position, as I don't like to have to deal with auditing and arguing over the definition of "profit".

A year ago the State audited me and found only one minor thing wrong.I deduct about $25,000 in property taxes on vacant lots I own as investments.When I first got the notice I was being audited I asked a few CPAs and they all told me I should just amend my 1040.

You can also use this to contribute to a solo 401k and provide yourself other benefits as well.Also what is passed through is not subject to SE tax it is recommend that you pay a reasonable salary or expect an audit.

Did you tell him of your concerns about how much time hes spending on job and that you need to audit the job in order to be comfortable moving forward, or did you put him on the defensive and cause him to believe that you werent going to meet YOUR obligations.Dont take this as an accusation...

Good luck - NedPS if you get audited and thrown in jail, may account was hacked and I never wrote this.

.- If you'll be an equity partner, make sure you have a good methodology for auditing the investors.