The team members are former vacation rental owners so they understand the nuances that make for a good site. 

So I totally understand how to add value to a rundown property by doing the work myself -- it's good old-fashioned sweat equity (more properly termed "trading time for money.")What I don't understand is how it works to add value (at least profitably) by hiring it out.

I understand that any cash that I put down at the time of purchase is a cost to me. 

@Harit Pat I also highly suggest teaming up with a broker who you'd want to build a relationship with and truly understands the ins and outs of different underwriting guidelines.

And just so we're clear, I understand the depreciation recapture, I am just unsure on the "nonqualifying use" regulation since the home was first a primary residency to begin with.  

I think I am gathering here from the responses that we are safe to say as a GP we own the property as are the other sponsor, but for additional clarity, disclosing shares in some cases may help bolster tacit understanding of who does how much of what.

I do understand its may not be huge cash flow just yet but wanted to start building my portfolio. 

Not all the section 8 inspectors understand this.

Fully understand the land development process.

This is contrary to my understanding but he is adamant that this is the case.