@Bacongo Sandou Cisse- thanks ...if you will need financing - make sure you can get pre approved  or have access to funds to use to buy  before you spend too much time looking for proeprties - thanks 

You will have earned $90,000 in rent income and gained $34,000 in appreciation after five years.or...Buy four houses with $50,000 down on each.

I thought this was strange, and they commented they wanted to buy it because they had a large gain and wanted to buy it to offset these gains.This was an immediate red flag.

And as my target tenants are traveling and may not always have access to a larger computer screen that is something I will look into prior to the next tenant.Good luck, and thank you so much for the information.

I would in a normal course of a rehab replace cast iron lines on the interior of the home and basement if they are accessible and if I already have a plumber there doing work as those are cheap and easy to replace at that time.

Lastly, if the home has appreciated at all, taking advantage of Section 121 and taking capital gain exclusions is just another strong point towards selling within the 5 years if you've lived there for at least 2 years. 

Same for a collapsed sewer pipe - they won't pay for the repair to the pipe, but they do need to pay for the damages caused to access that pipe like removing flooring, drywall, concrete, etc.

I'm just wondering how to handle the capital gain tax between me and my partner.

Even the modest 4% annual appreciation equals wealth gains far above any monthly cash I can make on a rental.

Having been in the lending space for a while now,  Interest income is not passive - its considered/taxed as ordinary income- just like interest you receive from your bank and savings account.Regarding profit and expenses from a flip, "that depends" on many factors but again if its short term capital gains, its not tax friendly.As always consult with your tax advisor / CPA.