We updated the unit - mostly cosmetic, rented it, and eventually will get a mortgage on it.

Update:  I called sears and they took so long that i just fixed it myself. 

I will check it out and update the post when I do.

Unfortunately, the friend did not fix the A/C properly, but he was able to invalidate the warranty from the original installer.Also, while I haven't experienced this myself, I have read cases where judges have claimed that tenants have equitable interest in a property that they updated.

Can I go to a regular bank and get a conventional mortgage for less than $50k? 

However, @Ashish Acharya is correct that in order for it to then be subject to self-employment taxes substantial services must be rendered beyond what is normally included in a regular rental (a long-term rental). 

Denise - this also answers my question of obtaining your book and getting updates to the Alabama process.

amount owed on loan-$185k-(FHA)I have done some light rehab to update andI am considering putting 20k in and refinancing to conventional 30 year to lower the payments.

They have regular meetups in your area.

@Carlito King This population tends to have fallen behind on the updates and often have deferred maintenance.