This is why I prefer financial statement audits and stay away from tax lol.

I've been audited, but I do actually live in them before I rent out. 

My thinking is that usually with a mortgage you see the interest paid as a single entry and that entry on the statement is the only asset covered on the note and easily transferred to a tax return but if Kyle uses his HELOC like most and on same credit line, he pays for CAPEX or repairs before he has a separate account built for those items from proceeds, what added measures might he have to incorporate into his plans to avoid red flag audit by ensuring his records reflect the proper amounts? 

Our loan auditing process which would include a new appraisal with an acceptable variance of said 10%. 

Business tenants will audit this reconciliation and push back on charges they don't think they want to pay.I could go on about more of the differences and what is involved with commercial property management but then I'd have to charge you hourly for consulting fees ;).Concepts for you to research: CAM, CAM reconciliation, gross leases, net leases, E&O insurance, service contracts, trust fund accounting, MRI, Yardi, and local licensing laws.Not a lawyer or tax professional, the above is just my opinion and not advice.

The purpose I believe is to have a more experienced managing broker audit your contracts written over the 1st 2 years.

The bank was audited and since I had a rental insurance policy on the property they questioned why I wasn't living in it.

Upon audit of a short sale I have seen where a bank reverses a short sale approval as well.

Trying to impartially assess what went wrong, I honestly don't think it was me.

This is pretty much why I wouldn't buy a mature company, I would buy the assets but the name and history of a mature company would need to be valuable, clean and auditable for me to consider it and suffer the brain damage.