We're trying to find an ethical and equitable solution that would help them and help us redevelop the building. 

And that’s when you forgot to count the principle pay down.

Then, if you want to get into flips in the future, you'll be locked and loaded.I find wholesaling a rather dark practice and of questionable ethics, mainly because most wholesalers don't properly disclose what they are in fact, doing. 

They just might not be licensed, might not be ethical, usually don’t answer to a broker or a regulatory body (unless they are licensed) and use a different sales process where the EM typically goes hard earlier in the transaction and the buyer is on their own with fewer contingencies and less time to do their due diligence.

The property is a 6-unit building in Los Angeles.Given the significant difference in current rents vs. market rates, I'm looking for advice on how to legally and ethically approach raising the rents to reflect market value, should I decide to move forward with the purchase.Some additional context: even if I were to negotiate a better (reasonable) price and were to successfully evict a tenant who is 5 months behind on their rent and charge the market rent for that unit I'd still be -$600/month. 

So, it'd be a 12 month of interest only payments before full principle is due.So, my strategy is the following..

If the plan is to stay with a commercial loan, the construction finance and permanent loan can be one product, with typically a 12 month interest only period during construction, then rolling into a principle and interest payment afterwards. 

I assumed that we would end up basically owing nothing since depreciation, repairs and non-principle portion of our mortgage payment on the house greatly outstripped the amount paid toward principle.The tax preparer said we had to pay taxes on essentially the entire rental payment since our income was basically at 150k.

The principles are the same.1.

However, I recently picked up this book by Brandon Turner, Rental Property Investing, just to investigate and educate myself on some basic principles of investing into rental properties and house hacking.