In a fix n flip you are buying primarily to resell which is why Pratik identified that you'll pay ordinary income. 

If this is what you do and you are a developer/builder then you could be classified as a dealer with inventory so profits would be recognized as ordinary income. 

Kitchen, flooring, paint, gutters, patio, windows and landscaping where the things we were planning on doing ourselves.  

@Ed ParkThe BP calculators are there to determine whether you should get into a deal or not.We are cash-basis taxpayers so we normally only deduct expenses that are paid out during the year so long as it is ordinary and necessary to our business.As such, reserves for vacancy, reserves for cap-ex are not deductible.We would instead expense actual repairs, insurance, real estate taxes, mortgage interest, etc.Security deposit is not taxable.

Income from the K1 will flow through to your personal tax return and you will get taxed at your ordinary income rate. 

This will be at your ordinary tax rate up to 25. 

Besides, any depreciation deduction is recaptured when the asset is sold, albeit at a lower tax rate than the ordinary income that was offset by the depreciation in the first place.Another important consideration is that an investment yielding a 2.0 multiple isn’t necessarily a better investment than one yielding a 1.4 multiple.  

New renters are wanting space, optional room to telecommute (this can be a new standard feature as it has forced the workforce to learn to work remote), yard and some amenities that you can use on your own without the worry of others being around such as, grills, patios, in-home gyms...all things that apartment living usually offer as an amenity since the smaller floor plans and no yard do not allow you the freedom of bringing those features inside your place for private use. 

This is not an ordinary appraisal and most appraisers won't understand all of the issues present.

@Robyn Smyles it probably doesn't matter because it is taxed as ordinary income so it drives your total income up.