Is your client trying to split and sell under SB-9, or another preexisting subdivision method?

This should be much less in a build verses as renovation where you find unknown preexisting conditions.

The limit is $1M:Rule 504Rule 505 would likely work just fine:Rule 505Your question begs the question as to whether or not you'll be soliciting for new investors or if you have a pre-existing, substantive relationship with the investors for your raise.  

Pre existing property deals are typically from 75/25 to 60/40

Because it is a recurring issue, it's not your tenants responsibility.Because its a pre-existing issue and you rented it knowing that its was already broken, you can reasonably expect it to get worse through normal wear and tear. 

I’m considering purchasing a two family rental property with Pre-existing tenants.

I agree with the others about HML's, it is almost unheard of to find lenders willing to lend 100%, especially to someone they do not have a pre-existing relationship and track record with.

Most likely a pre existing relationship would already exist.

There are exemptions under state law, but know the law before you go talking specifics with people you don't have a pre-existing business relationship with. 

REALTORS® shall recommend that sellers/landlords obtain the advice of legal counsel prior to acceptance of a subsequent offer except where the acceptance is contingent on the termination of the pre-existing purchase contract or lease.