Active Income: Profits from fix & flips are considered active income, subject to ordinary income tax rates, unless structured through a business entity.4.

HELOC would not be a bad idea.

A better idea would be to sign a new lease agreement at this time, plus or minus an option to purchase.

Go to some REIA meetings, get some business cards and recommendations, and really put some time and effort into getting set up? 

. - Call every 2-3 days to get project updates - Pay for materials with your lowes pro business credit card over the phone - Ask contractor for itemized list of things that needed to be doneThe above will ensure your sucess.

As I mentioned we are relatively new to the area and are currently starting up our business from scratch.

This property is close to the down town, near a bus line, and fit the business model.

Find a lawyer who specializes in landlord-tenant law in your state, and not only that, but who know the rental and property management business well.

Step #PhaseStep1DiscoveryTalk to experts and learn (process, tips, design tips)2DiscoveryCreate social media and document story3DiscoveryGeneral research - budget considerations, financing options, permits, regulations, tax considerations4DiscoveryMarket research - competitor analysis, analyze guest reviews, market trends5DiscoveryGather ideas/inspo (blogs, articles, youtube)6DefineCreate brand and vision7DefineCreate guest requirements (e.g. coffee maker, natural light, near activities, etc.) and prioritize must have, nice to have, etc.8DefineSketch idea for look and feel (architecture and design) - map out the floor layout9DefineConsult an architect (is this needed?)

Does this overall strategy sound like a good idea?