So, you're not "wrong" in thinking it's complicated.The tax code plays heavily into how certain transactions are categorized and there is some flexibility regarding what we can capitalize versus deduct.

It puts each expense in the appropriate IRS code and punches out year end summaries that I email to my tax team. 

There is no Promote and no investment from the Sponsor (usually) - so there is no alignment of interest, but the better Sponsors want to keep their reputation. 

From my understanding the 15-18% IRR promoted by syndicators generally does not include these tax benefits either, so it is still a fair comparison.AssumptionsI had to make a few assumptions about the property and mortgage interest rate:Property value = $180,000Rent = $1680Mortgage Interest Rate = 6%I also made assumptions related to other costs such insurance, taxes, property management, maintenance, capital expenses and vacancy.

To determine if the expense should be classified as a capital improvement or a deductible repair, the context of the expense is very important.An example is, if an item of expenditure is part of a general plan of modernization, renovation or rehabilitation to equipment or other business property, it typically must be capitalized even though on its own it would be currently deductible.According to IRS Code, expenses that you must capitalize are those that:Materially increase valueSubstantially prolong useful life (including replacement of deteriorating assets)Adapt the property to a new or different useHowever, you are allowed to deduct expenses and fees for routine maintenance and repairs that help keep the property in efficient operating condition.

You MAY be able to ensure nobody is living there and avoid the need to use a constable/sheriff by having the municipality's code enforcement office post a notice saying the place is "uninhabitable".

Be sure to check permit and code requirements.5.

The zip codes here in Memphis that have the greatest appreciation will not have any cash flow.

This change improves privacy and minimizes unauthorized access, but it's essential to consider local building codes and regulations, as many jurisdictions require safe egress routes for basement units in case of emergencies.

I heard a video promoting Intellihost - wonders if anyone has used?