I'm surprised at the responses here, and think there could possibly be confusion and an assumption that might be created in the responses.To provide a based answer, my question to @Zoe Brennan is, are you working on the investment opportunity with your time as well? 

In Texas, there’s no state income tax on rental income, but LLCs have formation and annual fees.This post does not create a CPA-Client relationship.

To give you an idea of what taxes look like on a sale below is an example for a property in Texas, obviously everyone's situation is unique and you'll need to meet with a CPA. 

The concern with the DSCR loan is that I need to make the property present as though it's rented to individuals during appraisal (tough since it's a working rehab facility now) and must create another lease that shows the tenant as personal and not a company.

Consult a tax professional to optimize deductions and explore strategies like Real Estate Professional Status or short-term rental loopholes to apply depreciation to non-passive income.This post does not create a CPA-Client relationship.

A homeowner I worked with wanted to remove a load-bearing wall to create an open-concept kitchen.

Even if you can, why do you want to create a note that has such a high risk of default?

I have gotten accelerated depreciation that has exceeded my initial investment.Now add that you could perform a value add to create some sweat equity. 

- What are the key items to consider from a code/zoning stanpoint when researching various towns- Any unique items to consider about financing a small multifamily? 

Many of the estate properties are located on lakes or rivers providing unique recreational activities.