It’s off of a very busy road with lots of frontage and its own personal billboard on top of the building.I’m having a hard time figuring out what to do with the property, whereas it is more on the outskirts of town.

Also, it can avoid filing an amendment.Another great point on eligibility- SEP IRAs require net self-employment income from activities like 1099 contract work, real estate sales, wholesaling, or other self-employment business income.Passive income as you have highlighted, does not qualify. 

Start by being actively involved with your PROPERTY MANAGEMENT duties.  

All the other real estate in my businesses are counted as assets minus the debt liabilities for net worth purposes and the business income that comes to me is counted as part of my personal income.

If you have equity and decent credit, a conventional Fannie Mae HomeStyle (or the Freddie Mac version) would likely be the better option instead of an FHA 203k loan (which will require a 3rd party HUD consultant to oversee the deal in addition to having the contractor involved). 

All businesses can hit speed bumps during any growth period. 

In CA, you are legally required to have a CA LLC if you are "conducting business in CA".

We rented the 2/1 side for $1300/mn and thought we could finish the addition of the bath and closet but got so busy with my construction business I still have not completed the work.

I also had horrific PMs, particularly involved with a 48 unit apartment complex in Houston.  

I would tend to agree with the other CPAs typically.The 500-hour test is one of seven material participation tests used by the IRS to determine if a taxpayer is actively involved in a trade, business, or rental activity.