Don't change to much and ruin it's character and charm of a SFH. 

This example is great Sean....I'm in Baltimore, Maryland and would like to know how or what bank allowed you to put only 5% down....were there attributing factors that allowed this.

FICO scores vary month to month by 5-15 points just as the weather changes to and fro even if you do absolutely nothing different (this is why I don't like preapproving folks within about 15 points of the minimum FICO that I need, or if I do then I also tell them how they can bump it while simultaneously out house hunting), so don't think of attributing a 2 point drop to a credit inquiry. 

Evaluate the commerical property as just that a commerical space not as a commerical kitchen as you are being charge for the attributes contributing the kitchen aspect which can be removed.

While you could choose an "S" corporation and have pass-through tax, there are a number of problems with this: (1) you are possibly creating character mis-matches of ordinary income and passive losses, depending upon the level of management activity you have; (2) a buyer is not generally likely to want to purchase your fractional interest in stock - they will insist on a discount or worse, an asset sale. 

I hate to see properties like this with so much character and potential left to just crumble.

It gives your posts a little more character.  

There is money is  you can scale low end properties that's for sure.. he was quite the character and once I realized his name and mentioned it he was famous in the area I just had never heard of him.  

@James Black, The part of your gain that is attributed to depreciation recapture will be recaptured regardless at 25%. 

Hoping you (and I) learn the definitive answer soon.So sorry you've had this episode in your REI career; somewhat unglamourous, but an experience to build character none the less.Stay safe/well.