Such conversion need not comply with the requirements of the following specific provisions of this chapter:(a) Section 13-196-660 (height limits); however, in frame buildings, four or more levels of living space shall be prohibited and in buildings of ordinary construction, with or without attic living space, five or more levels shall be prohibited; (b) Section 13-196-050; however, all dwelling units must comply with the exit provisions of Chapter 13-160 except basement dwelling units may have a second exit through a room containing a heating plant; (c) Section 13-196-670 (stairwell enclosures); (d) Section 13-196-680 (corridor enclosures); (e) Section 13-196-690 (dwelling separations); (f) Section 13-196-710 (basement ceiling construction); however, if the basement contains a dwelling unit the entire basement ceiling construction is to be wood lath and plaster of half hour construction; (h) Section 13-196-720 (heating plants); however, basement apartments are to be separated from heating plants with partitions of one hour construction.

Anyway when I file taxes next year I realize I'll be claiming 100% of the income on my taxex, but I had planned on adding his portion of the profit as a loss on my schedule E, perhaps as a management expense.

I know this post is several months old so just curious, did you end up deciding between 505 Cedar or 300 E 4th?

@Ivan Barratt  I don't know about that just opinionated  :)  its not rocket science just buy close to the median in a given MSA use a quality company and a very good PM and things should go OK for you.its those that are determined to find the highest return and don't weight the risk or don't realize that risk is pricing the market..  

Every market is different, but I know in my market here in Connecticut an offer with no inspection contingency and a high earnest money deposit amount carries a lot of weight.

If you used the cash out money to purchase another rental property, then the mortgage interest on that portion of the refinance loan is deductible against the new property's Schedule E. 

Ed E.

I’m not saying this to brag or anything just trying to give you a sense of who you’re chatting with.Well anyways, I’m still in the E quadrant so I’m going to watch this game and start getting ready for tomorrow.

And, I am educating myself to try to start an e-business based upon my years in RE. 

In addition to these expenses - I am sure you have others expenses.This will be reported on Schedule E.