How high you can go up on such a small size parcel can make a big difference in returns.If the buildings are old the procedure to tear them down could get expensive.Also tenants on current leases the disruption to their businesses would likely need to do in stages more (start and stopping) with development and meanwhile labor and material costs can go up.

When I have previously checked into this with my accountant it seems their are very specific tests to pass to be considered a materially participating passive investor, namely that you must spend half of your time and at least 750 documented hours in passive real estate to qualify to deduct depreciation. 

The test is pretty tough if too much material is thrown at you!! 

. $2,000 in materials but we did all the work ourselves. 

I know price points when it comes to materials and vetting contractors and professional services3.

Notwithstanding the foregoing, no material amendment to these Bylaws shall be made without the approval of at least 51 % of the Eligible Mortgagees and (ii) the consent (by vote or written consent) of Members representing 67% or more of the voting power of the Members of the Association.

I figured this is the best place to start and while I wait for responses continue to research my area.Things I haven't done yet-learned the buying process-read and understand the contracts-find a good contractor-find a hard money lender-figured out what I don't knowThanks for taking the time to read my post, if you have any suggestions on reading material that would be awesome :).

mid-sized apartment building, you should be working with an experienced broker and/or attorney who should be able to advise you on what materials and {diligence} conditions should be identified in your APS.Building on what has been stated above, be sure to include the collection of estoppels from all tenants (and suppliers) and to have the clock on your diligence period start only once the Vendor has supplied the information requested of them (in the APS).Other items which we typically request as materials include: all leases and contracts; blueprints, engineering diagrams and assessments; existing environmental assessments; authorisation to pull the permit and work order / citation history on the property; finances for the past 3 years; current rent-roll along with economic vacancy (physical vacancy, concessions, evictions); list of recent CAPEx; statement of reserves (note: this should be included in the financials, but you never know).

Even if you found a GC that would , all they will do is bump up what they pay their subs , and when they buy materials at the supply house the invoice will be retail their discount will be on another ticket .  

From all the reading material and bigger pockets podcast I've come to the conclusion that acquiring leads and learning rehab cost is fundamental to most real estate investing vehicles.