If you're going to be able to put it to work performing better than it is now, then I'd consider selling.  

I know all about taking a poor performing rental and turning it a great performer through rehab.

HI Jonathan,Since conventional owner occupied on a duplex will require 15% down min and 25% down on triplex to fourplex you would be limited to FHA financing in most cases.3.5% down payment on 250k is 8750 which should be sufficient given the amount you mentioned you have above (25k).Yes you can use the rental income.The appraiser will need to perform a rental survey on the gross rental rates in the area.

In particular look for ones that are professionally managed but performing poorly.  

If you are looking for passive income, validate to pay history and perform enough due diligence you are comfortable payments will continue.I use an old school HP12C to calculate yields and cash flow.

Nothing wrong with that but they should have been upfront with you on the rehab progress so that you could perform an inspection once the rehab was completed.

Ana,It's not so much a function of how much time you spend at each location.Rather, the IRS is concerned more with the necessity of having each location and what work is being performed at each location. 

Hello BP members,I'm Clint Walker owner of PREMIUM REAL ESTATE INVESTMENTS,LLC and I invest in Non-performing notes.

In contracting , the contractor isnt receiving a "cut" , they are charging for the work performed .

Once you have a contract drawn up, the settlement company performs fairly generic work to close on behalf of both parties... more importantly, what terms has he suggested for seller financing and how motivated is he to "offload" this property?