-I will then put in place a lease agreement between ourselves personally to the new property management LLC to lease the cottage and between the ownership entity of the other rental property to the prop management company. 

They will have a reclaim period or something like that where they just have to pay you whatever you put in + interest.

The amount of pro-nouns you used in your post completely distracted me from the question...WTH. 

It is better to have more vacancy up front and put in a great tenant than to settle for a tenant that has a voucher (that you would say no to if they did not have a voucher).  

The other trick I would do is I would fudge my numbers on the rehab to make the numbers work so I could stay under the 70% ltv and not put in too much money on deal. 

Although in my experience, people are chasing rainbows and not willing to put in the work of it all. 

We put in an offer yesterday that was accepted so hopefully this is a good step in the right direction. 

Remember you are speaking to all your future guests with what you put in your reply. 

I could also put in the hook ups and have tenants bring their own equipment.

Capital Gains:Now, you bought the property for $700k and put in $25k in renos, so your adjusted basis is $725k.