They're just the 'payment module' that goes on an otherwise industry standard washer. 

Does anyone have any guidance on threshold standards?

The Cap rate of 6.5% sounds good but i am not sure if you deduct all the operating cost. 

Again, the agreement was between the bank and her... not me.If the land owner wants to receive the tax deduction, then they should refinance the outstanding balance and have the loan in their name.

You could just deduct the payment from the cash flow (assuming it's both principal and interest) after you run the report, while reflecting a 25% down payment within the calculator.Also, while this will impact your cash on cash return, your cap rate will be unaffected as cap rate disregards financing.

You might be able to more deduct the expense in the same year as well under different code( sec 190) see below.Remember, expenditures unnecessary for compliance with the Americans With Disabilities Act of 1990 (ADA) are not eligible.If you spent more than 5k in both removing the barriers and making changes for the compliance,  you can deduct other expenses up to 15k rather than capitalizing and depreciating it. 

My suspicion is that the issue is not the refinance but the cash out refinance which would make your LTV too high for most lenders' standards.

Would also be curious what standard market rate would be.

It’s akin to paying up in a hostage situation; tough call and it’s fair to say if it becomes a standard practice it’ll become a common practice.

@Dean Taylor You can read about these kind of loans on the HUD website : https://www.hud.loans/fha-221d4/In my opinion, syndicating equity and getting a standard commercial loan would be a better option in most cases.