Another option is to split the cost based on the number of occupants in each unit but this also means you'll need to adjust the charges as tenants move in/out, so it requires more work and I wouldn't recommend it.

While this may not apply to you, but with my CFO clients, the first thing I recommend when looking to invest, is to first look at a city/market where you either 1) currently or have previously lived, 2) have family/friends that live there, or 3) travel to for work or vacation frequently.Are there any markets that come to mind?

Thanks Chris and Nathan, my plan is to have Atleast 1 LLC in each state wherever I have property and keep few properties in 1 LLC each state.

Warren Buffet said the most important part of investing is to protect your principal. 

Selling at FMV avoids the gift tax but provides your child with a higher tax basis, reducing their future capital gains liability.A better strategy for selling below FMV is to sell the house at FMV on an installment note, then forgive interest and principal annually up to the gift tax exclusion amount.

Especially when it comes to the permit side of things.My initial plan is to ask as many questions as possible and to search for information so that I'm at least somewhat on the lookout for some of these snags. 

Generally, the court proceeding will dictate what is to be done with the property and who gets what.

The only other option that comes to mind is to make the improvements and try to achieve favorable rental rates to push the story that 2 BR homes rent for a premium because its unique.

My suggestion is to find some real estate industry surveys (via CBRE or others) and look for the MF cap rates in various cities/states/regions.

My plan moving forward is to acquire another 20 doors before years end and I'll provide another Portfolio update around then.Happy Investing!