However, these properties generally have a lot of land improvements that qualify as well as certain portions of electrical, mechanical and plumbing that can qualify.

@Dennis Bragg, how did you factor improvements and market appreciation into the buy-back price?

@Nate Pucel The depreciation basis for a rental property includes the purchase price plus the cost of renovations and improvements that add value or extend the property's life.

You may borrow an additional $35000 for hard cost improvements.

I did minor improvements to both of those, but unfortunately had to replace the roof on each (Flat roofs suck, lesson learned).

I was overwhelmed with projects at the time but paid $35,000 and sold two years later without any improvements for $125,000. 

There’s huge retal income potential if you nail that balance between improvements that wow tenants and improvements that merely look fancy but don’t justify higher rents.I’d also keep an eye on how your high end plan fits the local demand.

Excited and looking forward to improving!

Plan to make some tenant improvements to push rents closer to market rate for the area.

Their plan is to raise rents (on the poor remaining souls, improve infrastructure and exert some sweat equity.