You need a mechanical permit for the HVAC, and you need a residential construction permit or EZ permit open in order to pull the mechanical permit.

I didn't phase that correctly and should have put an emphasis on "Traditional Sale".I am willing to sell but want to do it "creatively" - if you will - to generate funds and positive cash flow from the note I would hold against the property.

Don't know what that means.6. 12.5% markup for reno/repairs...That's reasonable, yet, you need to have some mechanism in place for the bid process. 

If you get a property that has all new mechanicals, fully updated units, get it all done in a timely fashion, and still leave 25% in the deal you are WAY ahead of the game, due to the fact that you have front loaded risk and updated your mechanicals. 

i get one of those mechanical lock boxes from masterlock and mount it to a post or the deck, in the event that the smartlock fails i can get them a phsyical key from the lockbox by giving them that code.

Your borrower might not care anymore.Check for any recorded mechanics liens.

How is the roof, the mechanicals, water issues?

The irony is most investors who form LLC's do not operate them correctly, fail to obtain appropriate types or amounts of insurance coverage, fail to understand their coverage exclusions, take short cuts and don't obtain permits, use unlicensed and uninsured vendors,  fail to execute contracts with same vendors, don't understand the mechanism of additional insured status, indemnification etc. and are actually more prone to claims and conflict with their LLC than the individual who does not own real estate in an LLC but understands these tools I mentioned.

@Mike H.check out triple net leasing as to the mechanics of why almost 100% of hospitality and commercial properties are triple net leased.The main reason people NNN lease their property/s to businesses is because they want to own passive investments not actively manage another business.Very few if any investors manage the Hilton hotel property they own. 

He once told me that he didn't understand where my desire to work with my hands and become mechanically inclined came from.