The first step I'm doing is checking with the city zoning to see what they would allow before I get too deep with looking at plans, financing and construction. 

We had planned on eventually redoing the kitchens and floors in both units once we turned over new tenants, but the evictions accelerated that process.

I also look at future development plans in the area, as new projects can increase property values and attract more renters.

Have you thought about this approach or considered a phased plan to build up your portfolio?

Plan would be to sell. 1.

Dmitri then called the 10K an "onboarding fee" as a means of justifying why the fee would have to come first and reiterated that it would be 10K up front for every property I might want to purchase (if my intent was to purchase 2 properties it would be 20K up front, and if my plan was to buy 5, then it would be 50K up front). 

You are going to get conflicting responses on this because a lot of it comes down to your plans and your tolerance for risk, which are things known only to you.

During the partnership, you can jointly manage the property, increase its value, negotiate a flexible repayment plan with the seller that allows for larger payments after the property appreciates, ensure a written agreement that clearly specifies repayment terms and timeframes and refinance, and the sellers are able to 1031 at their leisure? 

Chances are, they will avoid you because they are not planning to report this income.

In MA, you can usually get insured with Fair Plan with certain pets, but it is VERY expensive.