Your debt % is 50%, therefore, 50% of the net income (income after expenses, including depreciation), would be subject to UBIT.

Even if you create a non-CA LLC, if you are managing the business from California, you will likely be deemed to be "doing business" in California and therefore likely subject to CA taxes.

A hard money lender who does NOT require a "subject to" appraisal  (which is an appraisal done with your scope of work in hand, and the appraiser gives you the after repair value) is 100% NOT doing you a favor. at all.

The investor also had no backup plan, and it was clear they hadn’t considered the potential risk if this failed - they just said "we would foreclose" - which if they did would (at best) provide single digit return...It gets even better, if they did get the borrower to follow their exit strategy, they would make around 13%...Here’s the problem: The gurus often make note investing sound like it’s just a game of persuasion, telling you it’s "easy" to get borrowers to agree to anything if you push the right buttons.

And also, since I am the borrower, am I correct in my understanding that I would be subject to a tax on cancellation of debt which would lower my total IRR.I saw many years ago (like in 2017) on BP that note investors were shooting for 10-12% IRR in a zero-interest rate environement. 

They have low interest loans which make buying their property subject to their existing mortgage a great exit strategy for these sellers. 

Different portions of land and building might be subject to different tax rates or legal considerations.Calculating land and building values for tax purposes is a critical step toward maximizing your available tax deductions from depreciation.

Also weather is a factor as previously areas were subject to a 100 year storm that is now a 20 year storm, which causes insurance to skyrocket.

Any guidance or resources to deepen my understanding on this subject would be greatly appreciated, as I'm fully committed to investing the necessary effort.

Without REPS, losses would be subject to PAL limitation.