(I'm thinking adding 2 Beds and 1 bath, or maybe a master with walk in closet and an on suite, a large corner home office, etc. raise rent to $1,600)Needs: Roof, Siding, and Basement Work (potentially more space if the basement is redone, adding a bedroom and bathroom, rent at $1,800?) 

An asset protection lawyer would likely recommend a separate LLC for each rental property you own because this limits your liability in case of a lawsuit (usually to the holdings of that LLC). 

With careful research and property selection, it's possible to find properties with good cash flow potential.

My investment approach required fixers with good value add potential.  

@Michael CaldwellI think the type of transaction is more important than potential tax consequences.

I know we just bought it but I see huge upside/potential.  

What makes the rental appealing to potential tenants? 

Hi folks, we are looking at potentially retrofitting an existing SFR with sprinklers in Seattle (city code might require for a new backyard build).

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

For example, you could find deals that have good long-term potential and buy enough money down so they throw off a bit of cashflow, but not so much equity that it limits your ability to scale.