The answers to these questions will tell you who the likely buyer would be, and depending on the buyer, you'll know how to market.As for price, what will the improved value of the property be?

I like your attitude and energy!

Upcoming special assessments for a roof that needs to be replaced or other capital improvement can kill your deal and once you're in, you're stuck with the bill if you don't negotiate the seller to pay it.And last but not least, if the building/association drops to less than 70% owner occupied units, forget about getting a loan in the development until the percentage goes back over 70%, which can kill your exit strategy.I don't mean to rain on anyone's parade, just be careful out there!

Anything else results in "boot" for which you do not income taxes.This is probably an issue of semantics but your basis would be what you paid for the place adjusted up or down based on capital improvements and depreciation.

I am in the process of setting my capital improvement budgets for the year and I need some suggestions.

I want to skip right over the 3-4 unit buildings as they are classed as residential investments and right into the commercial.Every effort you make to improve the building, each expense you lower, every rent you increase, is a direct increase in NOI and a straight up increase in the value of the property.

Once things turn, probably late 2015 early 2016, I'll be back in the US.Until then, unless it is a phenomenal deal that finds me, I'm just not expending the time energy or money in the US market.

Not included are repairs, capital reserves/improvements, vacancy, any owner paid utilities, and management.

Perhaps the start of an eviction will force him to a) leave on his own, b) get a steady job or c) run his business more efficiently so that he can pay his bills on time.And Something tells me that while you have yet to get your money, his cigarette pusher is getting his.

@Sean KuhnIf you put 12K of initial capital improvements into the property at purchase then I would include that amount in your initial capital cost (purchase + cost to put in service) and use that amount when calculating CAP, CoC, or any other measure of return.