They need to be added if you add more homes to the lot.

If he did not - then basis is certainly not correct and you likely missing out on basis from closing(lender fees, title costs, transfer taxes etc).Make sure you tell your accountant about the out of pocket upgrades - they should be added to basis(unless you expensed them in the prior year).

Will be adding 6,000 sq ft of self storage.

Generally speaking, these types of deductions are going to be added to depreciable basis, but they can occasionally be at least partially deductible, depending on what you've got going on.Consulting with a knowledgeable tax pro will get you a more definitive answer. 

Here is the link to last months and you can PM me your email if you want to be added to the email list.  

To your question, any "capital improvements" as opposed to a repair would be added to the cost basis of your home. 

(I noticed that Turbo Tax allocates part to land and part to the dwelling structure.)Similarly, IRS regs seems to suggest - and some folks have stated - that only improvements made before placing the property into service can be added to the basis, while others say that repairs and landscaping done before placing the property into service can also be added to the basis.  

One is the rehab cost, which has to be added in to the down payment when determining cash on cash return (since it's money back yearly vs. money you had to bring to close AND make the units rentable).The other, as I said, is that if you have to borrow the down payment, what are the terms of paying that back?

I sent it to jon so he can see what else should be added.

Some ideas: Offer the seller an envelop with 12 post dated check - they don't have to wait for the letter carrier.Offer to put a deed in liue of foreclosures in escrow with their lawyer - transferring property back to them in the even of non-payment or violation of the terms of the mortgage - Offer to have monthly inspections of the property by sellerLet them know they will be added to your insurance policy in the event of fire - they get paid offOffer additional collateral (like a blanket mortgage) - always on a blanket mortgage you should have a release clause after the equity reaches a certain amount - no need to tie up your equityProvide additional co-signersProvide your financial statement and a copy of your credit reportProvide your nice guy resume (written testimonials about you from past customers, transactions, your preacher and other lenders, awards, newspaper clippings of you rescuing a cat from a tree, awards from the Boy Scouts) have all this in writing.