I agree with the person who said they are likely short of money and grasping at straws.

It can be price or unique amenity or your personal charm! 

Would the person who takes on more labor to repair the property have greater preferred equity or is this usually treated differently?

I've used to it myself to analyze all of the 35 units I bought over the last few years and personally talked to 100's of other investors who've analyzed and closed on great deals using it.I'd love for you to actually try it and would be happy to receive and incorporate any feedback you have into future releases.

I suspect the person who originally turned it into a fiveplex only applied for permits to make a fourplex and then did the 5th unit fly by night (perhaps at a later date) in order so the property would still be considered residential and allow for better financing possibilities.

As an agent, I personally would love to hear your thoughts on how the implementation of AI will affect agents system processes or how it already has, however I would love to hear about it's impact in all facets of real estate.Apologies if this is a repeat post, I haven't searched much on the forums for this yet. 

Some manufacturered companies treat it as personal property not real property.

@Michael Plaks comments in this recent post on making sure the person you hire understands real estate sounds really relevant to your situation.  

If you are sole member LLC you just take a distribution from your business account to your personal account.You are likely already reporting the income on a schedule E.

Explore my personal favorites, Set For Life by Scott Trench or The Total Money Makeover by Dave Ramsey, for invaluable financial insights.3.