But I'm doing all the work.I know it's whatever you can work out, but I'm looking for a starting point for being fair, as this is my mom and we want to do right by them, though it will be completely passive other than they take on the material capital risk.Make sense?

Pay no attention to what the market is doing, it is always a good time to buy, or sell....don't follow any rules...Don't choose the cheapest Contractor or materials, ever..... follow the local rules and codes, this will save you big money.Don't cheat, and be fair.

I have driven all over the area.

@Kendall Bond One option would be to use the typical Hedge Fund model structured as a Limited Partnership with a 2/20 fee structure meaning meaning you collect 2% of AUM (assets under management) and the 20 is incentive driven meaning you keep 20% of the profits with a high watermark.

You'd have to establish that they're "at fault" (i.e. failed to pay rent, breached a material term of the lease, engaging in criminal activity on the property, etc).  

But you need to have some understanding of building materials, permits in your area, costs of material and contractor markups (again in your area) for the material to be truly helpful. 

It is driven by supply and demand.

With the SDCs, increase in labor costs, increase in material costs, energy code changes, land-use changes, existing buildings are a BARGIN.  

That said, if your contractor only wants to install gold plated materials in a cheaper neighborhood/property that doesn’t work. 

While the number of units can increase your deductions, what really matters is what systems and materials are used inside the house.Again a lot of factors come into play here.