Correcting this should adjust the profit at sale.Additionally, your property taxes seem quite low.

Quote from @Felicia West: Thank you, Zachary for your very thorough explanation.Quote from @Zachary Jensen: Hey Felicia, At a high level you’re correct that when you and your husband’s income exceeds certain thresholds (over $150,000), passive losses from rental properties, including depreciation, can’t offset your W-2 income unless you or your spouse qualify as a Real Estate Professional (REPS).

Last question, you are hiring an architect and submitting plans to the city in a renovation like this correct?

It shouldn't be a recurring scenario (or it looks a little less "accidental") but in cases like this, your job is to simply have the correct intent, see what you have done to demonstrate that and build your case.

Present yourself as the profesional with high end software and should help to maintain your growth going forward.

Tenant risk is lease term remaining, sales/billings from the location, overall financial health of the tenant (i.e. solo practitioner with this one center as their sole source of income and declining billings, will not likely keep the property well maintained, and when they move out, you will have work to do), need for this use and/or competitive urgent cares in area, etc. 

The important points often glossed over are (1) is the buyer providing their personal guarantee to the seller for the note (2) is the seller maintaining a wrap position so they can foreclose in the event of default and gain ownership (3) is the buyer putting up additional collateral (4) how large is the down payment (5) what is the LTV (6) is this a personal residence for the seller or investment property (7) will the property cash flow and if so what will the cash flow be (8) is the property in a increasing, declining, or stabilized area (9) is the property being sold at market value, or above market value because of the low interest rate of the existing mortgage and (10) how experienced and what is the track record of the buyer, and is the buyer purchasing a property for investment or to live in or otherwise use.  

Local Economic Indicators: Monitor local employment rates, population growth, and housing inventory to time your deals correctly.

Don't forget to factor for this - upon moveout, we reasonably expect to cashflow around $500/mo, which will allow us to maintain and hold for as long as possible to collect appreciation and yes some extra money toward the next investment. 

In a cooling climate your state's laws probably state the calendar date upon which heat needs to be provided (for example beginning October 15th) and the temperatures that the unit is required to maintain (for example 65 degrees). 2.