If the "improved the property" was something like a new roof, or a new furnace, then those long term upgrades get added to the basis of the house and then must get depreciated over many years.

House is in fairly good shape, built in 1980, tite roof built with permit in Dec 2009  closed in Feb 2010, and one portion of the roof is flat (ugh).

I feel CapEx is one of those line items most investors hate to put aside but are glad they did when the roof leaks etc.

I really love the idea of having multiple units under one roof.

Examples of qualified expenditures include costs for structural work, electrical and plumbing systems, roofing, and other improvements necessary for the rehabilitation.

Stout Roofing has been great for us.

I had to replace the roof $6k & cut the grass $1200.

Other than that, roof is newer, and there will be some drywall, new flooring throughout, appliances and a few other items.

Womp wompIf $4000 is 3 years cash flow this is probably not a good deal.I have a minimum cash flow requirement of about $4000/year due to the cost of things like roof, HVAC, vacancy, painting etc.Have you penciled the deal out to make sure it makes sense?

So altogether,  I spent $60k on maintenance on the 3 duplexes,  that includes appliances, windows, and even a roof replacement.