I like that, unlike with say trading for a hedge fund, I can create opportunities for others rather than solely line the pockets of someone richer (that being said I still intend to make money).

This falls under that category, by not keeping the heat on, you are ignoring basic maintenance and creating a potential risk.

Consider structuring your investment through an LLC for liability protection and tax flexibility.This post does not create a CPA-Client relationship.

When you said  "New Construction" I was assuming, wrongly" that you meant buying a newly constructed home and perhaps thinking you were getting some kind of bargain that created equity. 

As the tax code is concerned all of the costs to create your rental property business (buying it and making it usable for it's intended use) and one in the same. 

Use DIY tools for straightforward cases but consider professional help for maximum savings and audit protection.This post does not create a CPA-Client relationship.

What I said in an earlier comment about "section 179 can't be used to create a business loss", that wasn't entirely accurate/complete. 

We have offered to allow her to pay a reduced rent for the first few months as well but I am worried that may create some sort of limit on how much we can raise the rent on her in the future.

Do my 3 associates need to create a LLC to be able to do these renovations or can any individual do them, as long as proper permits are pulled? 

Make sure you create a screening policy and don't deviate from it.