I have a 40x15’ concrete slab patio that takes up most of the patio.

Ordinary investors don't have the level of capital to be able to do that.

Capital improvements include expenses for improvement to the property, such as a new roof, new siding or major renovations.Capital improvements for residential property are deductible over a 27.5-year period; Ordinary repairs required to maintain the property in good condition, such as painting, fixing leaks and replacing broken windows, are deductible in the year they are paid. 

The street-facing side of each block remains largely unchanged, a row of ordinary homes.

Am I thinking about this wrong or does it make sense to take this area and turn it into another 300-400 sqft of indoor livable space? The house otherwise is not even 1,200 sqft. Yeah, a very small house. But, this wou...

In both cases, syndication would be needed with a securities attorney.Here is the list of promissory notes recognized by the Supreme Court as NOT being securities is a compilation of nearly random examples:Notes delivered in consumer financing.Notes secured by a mortgage on a home.Short-term notes secured by a lien on a small business or some of its assets.Notes evidencing a “character” loan to a bank customer.Short-term notes secured by an assignment of accounts receivable.Notes that formalize an open-account indebtedness incurred in the ordinary course of business.Notes given in connection with loans by a commercial bank to a business for current operations.And the determining factors for how a court will judge it to be a security or not are :Whether the borrower’s motivation is to raise money for general business use, and whether the lender’s motivation is to make a profit, including interest.Whether the borrower’s plan of distribution of the note(s) resembles the plan of distribution of a security.Whether the investing public reasonably expects that the note is a security.Whether there is a regulatory scheme that protects the investor other than the securities laws (e.g., notes subject to certain banking regulations).Again, consult an attorney.

Every note seller knows this is taught so those assets prices get jacked up and sellers get very high prices for them.I also see many people make big mistakes as they do not understand how to calculate returns and think if they are getting a $50,000 UPB note with a 4% rate paying $200/month for $25k they are doing awesome, then the loan starts reperforming and they realize after servicing costs it will take 12 years to get their money back which is approx. a 6% return - tack on paying ordinary income on that return and you mine as well invest in municipal bonds. 

Tan, salt finish concrete patio.

Why do I dig down 8" from the ground and find a layer of old chicago bricks, is there a patio under there? 

As it stands, my K1 states a high amount of business ordinary income (Box 1) along with a minimal distribution amount (Box 12).However, a loan officer recently pointed out that he can't use any of the business ordinary income for my DTI and can only use the Distribution amount.