There's some complicated ways around it and things may have improved, but I can tell you that I was personally threatened with being charged with a felony in 2019 for renting my property even though I had gone through the proper permitting.

As for whether one has to get quid pro quo in increased rent for improvements, there is also a factor of the quality and longevity of the tenants one gets with an upgraded apartment even when rents are limited by neighborhood competitive pressures. 

That improves my ROI and lowers my risk. 

I would also say that while refinancing could improve cash flow, it's speculative, so you would want to ensure you have a solid strategy in place to manage the negative cash flow.

As the seller I would pay for the energy audit, do the analysis on the work to be done (cost vs savings) and then market the home with a prepackaged improvement contract that would meet lender guidelines (solar, EE windows, etc). 45 day close to allow for enough time to do loan and obtain permits, occupancy COE+2. 

Continuous improvement is key to long-term success.Please feel free to DM me if you want to discuss further and potentially get your investing started!

Just as crucial as the property upgrades is understanding which improvements to make based on your exit strategy and target demographic.

But, for property managers working on owner's behalf, there isn't a way to be able to modify chart of accounts both for property manager to track operational expenses and for owners to track mortgage payments, insurance payments, accumulated amortization, depreciation and improvements.

However, when you sell the individual condo units, capital gains tax will be triggered on the gains attributable to those sales.Allocation of Basis: The original purchase price and any improvements made should be allocated among the individual condo units to determine the basis for each unit.Gains Calculation: When selling a unit, the gain is calculated based on the difference between the allocated basis and the sale price of that unit.Partial 1031 Exchange: You may be able to use another 1031 exchange to defer gains on the sale of individual units if you reinvest the proceeds into other like-kind properties.

Continually improve it to gain efficiencies and free up your time.