Other people want to maximize their monthly cash-flow.

@Brian Van Pelt makes a great point that will that can often be applied to to friends, family, coworkers or anybody you have a meaningful relationship with as relationships can sour just as much or more than a potentially failed investment, which is often enough for a person to avoid helping loved ones when large sums of money are involved.That being said, since you're looking at the risk vs. reward in this scenario, it could be structured in such a way that definitely limits your downside and maximizes your upside. 

Bernie Sanders wants a 25% “house flipping” tax levied against investors who sell a property at a profit within five years of purchase.He also wants a 2 percent “empty homes tax” on the property value of vacant homes in order to discourage real estate investment.From Bernie's Website"When Bernie is president, he will:Create an office within the Department of Housing and Urban Development to coordinate and work with states and municipalities to strengthen rent control and tenant protections, implement fair and inclusive zoning ordinances, streamline review processes and direct funding where these changes are made.This office will convene key leaders, academics, experts, local officials, renters, tenants, and homeowners to create and implement these necessary solutions.Preempt laws that prevent inclusionary zoning for luxury developments.End exclusionary and restrictive zoning ordinances and replace them with zoning that encourages racial, economic, and disability integration that makes housing more affordable.Require that recipients of federal funding from the Department of Transportation and the Department of Housing and Urban Development make these important zoning reforms.Provide funding to states that preempt local exclusionary zoning ordinances to make housing more equitable, accessible and affordable for all.Make federal funding contingent on creating livable communities.Encourage zoning and development that promotes integration and access to public transportation to reduce commuting time, congestion and long car commutes.Prioritize projects that reduce greenhouse gas emissions, create walkable and livable communities, and reduce urban sprawl.Encourage zoning and development designed to expand and maximize the number of units fully accessible to people with disabilities.Place a 25 percent House Flipping tax on speculators who sell a non-owner-occupied property, if sold for more than it was purchased within 5 years of purchase.Impose a 2 percent Empty Homes tax on the property value of vacant, owned homes to bring more units into the market and curb the use of housing as speculative investment.Encourage “circuit breakers” on property taxes to protect homeowners in gentrifying neighborhoods from being priced out of their own homes as their property values rise.READ MORE: https://berniesanders.com/issues/housing-all/From my point of view, anything that impedes or obstructs REI's cash flow is a bad thing.

I would recommend finding a CPA so you can set yourself up to maximize deductions when you file next year.

The townhouse itself is in livable condition, but we are trying to maximize our return, and are wondering how far we should take our remodels?

It outlines creative methods for maximizing your real estate investments while limiting the cash you have to put down yourself.Best,Paul

If your strategy is BRRRR, which is heavily reliant on financing; it's more important to save hard credit inquiries and maximize your number of conforming loans before going commercial, portfolio or hard money lending options.

Brought the house back to code and compliance together with adding a bed and half bath to maximize the potential.

@Maxim Khanin if you are asking if you need a lawyer; you need a lawyer.

I guess your main suggestion would be to find a much better deal, thus lowering all costs and maximizing potential return.