It is the very start of my research, and based on a call with a friend recently, I may also be adding or removing certain markets. 

Its helpful knowing this work can be added to the basis and depreciate over 15 yrs. 

I BELIEVE it will be added to your regular income and taxed as such because you didn’t hold it for a year to qualify for the long term capital gains rate of 15%. 

The math doesn't work for the 'renter' because of the poundage that has to be added to the rental agreement....you have to craft a timeline for the purchase to strike, then design your right of first refusal and it's non-refundable surcharge above and beyond the security deposit, and the monthly surcharge that is to be dedicated to the down payment. 

Rent - $800/monthThe second unit is currently 1BR, 1 Bath but a second BR can be added to oversized living room.

All cash flow income will be added to your total income and be taxed at your income tax rate.However, you deduct several things from your taxes from rental properties: Mortgage interest, property taxes, management fees, repairs, basically any expense that goes into your rental is tax deductible.

I've been informed that the extent of validity of the purchase agreement has lapsed (45 days)  and an addendum must be added to reflect the new interest rate. 

Remember, you will probably be adding at least $2-300k in value for the 2nd unit.

Thus today I will be going to Lowes to get some 4' x 8' bead board panels to match a house I'm working on.Also, regarding local yards, I'm doing a major project in a town that doesn't have Lowes or HD but has a local yard literally 3 minutes drive from my project.

A lot of investors on BP and other places focus on homes that may have a "value add" in terms of a bedroom or bathroom that could be added somewhere in the home to maximize rental opportunity.