I don't know if you have a full pipeline of deals or something, but unless you have a ton of volume of solid CRE deals, most lenders are not just going to be available or out there the way residential lenders are because of the different types of lenders, and then the subset of focus from each of those lenders (there are many lenders that play in the same sandbox but don't have the same appetites). 

California charges a minimum tax of $800 a year per LLC, and more if you have gross receipts in excess of $250k.

I talk to our local Section 8 office frequently as a property manager and in the begin they made it VERY CLEAR that the minimums are to protect the landlord AND the tenant.Most likely, the tenants are not going to have excess cash flow or savings to cover any of the damage to your "upgrades". 

You can invest excess cash flow and get 5% return (online savings, CDs, treasuries) (or simply pay down principal). 

Also, thanks Steve, I'm glad some people agree with this required license being too excessive.

Second, I know the tenant doesn't have excess funds as they are still dealing with the effects of hospitals, drs, etc.

Quote from @Kent Smith: I have read several threads on thisYour rent income will be erased down to zero by your deductions, so you do not owe more taxes.Also, you do not owe less, because you cannot go below zero.Good news: the excess loss is not wasted.

If your losses exceed your gains, you have a net capital loss for the year.Offsetting Other Income: If your net capital losses exceed your capital gains, you can use the excess losses to offset other types of income, such as ordinary income from wages, self-employment income, or interest income.

I couldn't build you something for $105/sqft but $200 plus site prep is excessive. 

Fine and violation for excess trash dumping 6.