Meeting the 100-hour material participation rule qualifies your STR income as active as long as no one else participates more than you, This will allow losses to offset W-2 or other active income.While there’s no official IRS form to track hours, maintaining a detailed log is essential in case of an audit.

In digging into the details through public record searches I find out that he has had 3 evictions, several drug convictions, and a violent crime.

I know enough about a lot of things to be dangerous, but lack detailed expertise and certifications.I will say that I was extremely disappointed with my last realtors lack of construction knowledge so you will have a leg up there for sure, and you should play up that as a selling point

A good designer and architect are key for a successful project like this and keep in mind these aren't cheap.There's a lot more details to consider, feel free to DM me for more details.

One might even invite you to visit one of their projects to talk about it in detail and give you a peek behind the scenes. 

Adding to Trevor's step 5 -  create a detailed SOW. 

Happy to connect if you have all essential details.

Quote from @Olga Daisel: @Randall AlanI agree with Randall on getting more details, $7K gross a unit btw is a great gross income.

Without going into too many details about the property, I'm interested in connecting with people who deal with off market listings and investors in this geographic area. 

Quote from @Chris Shon:Thanks for the detailed response!