The IRS has tiers of accepted cost allocation techniques for real estate - a total of 6 tiers! 

You will allocate many of your deductions between Schedule E and Schedule A.

That said, given my fact pattern of a condotel- how do I even try to allocate each individual who might be employed by the management company vs the number of units in the building.

In a similar fashion, if you can imagine how much landscaping and underground infrastructure is in a golf course as compared to the clubhouse, that will give an indication of why an extremely high percentage of the property's value is allocated to the land improvements. 

At the present rate of rent it is not within our budget to allocate the funds for this expenditure. 

@Will Gaston I would suggest you at least get it inspected and see what the worst case number would be and then reassess.I would reevaluate numbers - if you bring in $8900 per month, and have to allocate the recommended 50% in expenses, and $3300 in PITI, you are bringing in $1150 with so many properties to deal with. 

I know there are plenty of insurance agents that want you to allocate a considerable amount to insurance regardless, as they are not fiduciaries and that’s how they make a living.

Hello,You should have the security deposit allocated to a specific business account. 

Then they said that I couldn't get the 10k USD back because "the funds had already been allocated".

I mean do I consider it as a regular loan/mortgage and set a certain amortization period to be able to calculate monthly HELOC interest  payment, and allocate as % to the "principal payment"?