If you hold it one year or less, your capital gain or loss is short-term.Short-term capital gains taxes are paid at the same rate as you'd pay on your ordinary income, such as wages from a job.

Use of sunroom and patio covers, as defined in Section R202, shall be permitted for natural ventilation if in excess of 40 percent of the exterior sunroom walls are open, or are enclosed only by insect screening.

Also worth noting it still has to be ordinary and necessary. 

Are the regular cash distributions taxed as ordinary income or capital gains?

All that being said 8.875% is not out of the ordinary high on an average DSCR rate right now

@Cory Carrigan, There's some confusion between "capital gains" and "ordinary income". 

Charge $300 for house, and then have add-ons for driveway, carports, patios (maybe an extra $100 for each of those).

I'd prefer a tiny house with a nice patio outdoor living space over a 3000 sqft property all day.

(Cut down the tree, flatten the ground, create one side turf and the other side concrete for patio/grilling purposes). 2.

So not only do you lose the opportunity to defer the tax you'll end up paying ordinary income on the profits.That's an almost 40% swing in profit.