The answer is "IT DEPENDS" - just like most answers to tax questions.The IRS permits a deduction for business expenses that are "ordinary and necessary" in the course of the business and that enables you to generate revenue.Some questions I would ask if you were my client:1. 

Just a heads up that you will be paying ordinary income tax rates on flips, not lower capital gains tax rates.

You still have a $200k capital gain (of which $100k is depreciation recapture) and you also have a $100k ordinary loss from those suspended losses.

I 2nd what @James Wise said, but if I were going to do it (and I was not working with load bearing walls, I would focus on the back area and hall.It really comes down to what our close in competition is getting and what their offerings are.If you see a more tidy, rain protected look getting more money without sitting on the market too long, or you don't want to offer something too downscale (looking for a little better renter--hopefully)....maybe focus on the hall and back door.Some of the things I see that can could the possible rent a little better might be, door types, a rain roof, concrete patio and trash areas, a cellular door bell on the bottom, an outdoor modern looking pigtail florescent light (day lighter), the interior hall with commercial tread covers and lighting like the sun (day lighter) as well as a sturdy metal handrail or two, and a window at the top.But as James said above--beware of spending when you don't have to (but that's your call depending on your close in competition).Good Luck!

Your payments will constitute an ordinary annuity.

the benefit for the owner is they get the interest up front in the form of higher price and there is also tax advantages with interest income taxed at ordinary income rate as opposed to principal pay down taxed at capital gains rates.so what am i missing???

I would increase that by 10% to cover ordinary fluctuations and then include a clause in their lease that says, "Rent includes utilities up to $165 per month.

Talk to a CPA, but visiting theme parks nearby doesn't seem like an ordinary and necessary expense of managing and maintaining your property itself.

Remember that many of your interested (e.g. wholesaling, Airbnb, flips) will be considered active income and tax at your regular ordinary tax rate. 

One thought: I've heard it can be advantageous to use an SCORP for flips because the gains are often "short term" (vs long) and taxed at same rate as ordinary income.