This is why a push-a-button mechanism enables new entrants to cross the chasm in to the mainstream market faster than their predecessors can hemorrhage.

Other random expenses could be included like a portion of your phone, wifi, travel, or other LEGITIMATE expenses related to running your real estate as a whole (and not to specific properties). 

If I were to acquire the property, what would I have do to make this a legitimate (and safe) dwelling without putting myself at risk?

Its really exciting because this enables us to get another water front property!

Assume an accredited investor and no securities law issues for simplicity.1) Homeowner pays for a legitimate appraisal.2) Homeowner grants the right to Investor to receive 10% of any appreciation above the appraised value when and if the house is sold.3) In exchange, Investor pays the homeowner an amount equal to 10% of the appraised value, with 20% down and the rest on an interest-only promissory note held by Homeowner.4) The note bears interest at Prime + 0% and does not have any origination fees or prepayment penalties.5) The investor gets credit for 10% of the eventual net proceeds from sale with the net being 10% of net sales proceeds less the remaining balance of the loan.6) If the investor defaults on the loan and fails to cure the default, the claim on the equity is forfeited.7) The homeowner remains fully responsible for costs of maintenance, insurance and taxes, but this is offset somewhat by the interest on the loan and the cash received upfront.8) Presumably if there is a gain beyond the homeowner's basis, there is no tax for now unless the proceeds exceed $250k for an individual or $500k for a couple.

At first I thought maybe the back was a converted garage but that is not the case - it is a legitimate 2nd house. 

That enables the interest paid on the loan to be tax deductible.

Signing over the house alone enables most lenders to immediately initiate a foreclosure. 

This was partly due because I enabled them to do so.

Long-term appreciation is big because I wouldn't intend to sell anything until retirement (30+ years from now) I am also in a very high tax bracket and hopeful that real estate investments may enable more deductions.Commercial:1) I've shied away from retail strips due to feedback from banks desire to not lend there and overall amazon impact2) Looking primarily at small office complexes (2-4 unit) with service businesses - anything to look at for with office buildings?