I understand their reasoning because of affordable housing, but they really should be working on how they can reduce the impact fees, taxes etc,... for developers to build more affordable housing or allowance for investors to purchase old hotels, land etc.... to also provide housing for homeless families etc...

It could be part of a larger program to reduce expenses and pass along costs.

In general, all of the costs associated with rehabbing the flip would go into the basis of the property and would reduce the gain at the time of the sale.There are many factors that impact your situation so find a qualified tax preparer that specializes in real estate to give you advice specific to your situation.Ed

This obviously reduces the cash flow from the property itself since it is the equity that generated the cash flow and not the property.

The corp profit from the interest I pay it will be reduced as i take a salary from the corp large enough to and use my carry forward losses in my personal name to reduce my corp tax to zero.

I wouldn't ask a realtor to reduce his fee for me.  

Track the income and expenses of everything you do in some sort of report and review it regularly with others you trust to possibly reduce expenses and increase your income and helps your company grow.  

Many items below $2,500 can be expensed rather than capitalized, which also reduces your depreciation recapture later in the life cycle of the property.  

Do not cut any corners to make a deal look better on paper but not in reality.Track all of your income and expenses that you are responsible for and review them regularly (in report form) with people that can help you possibly reduce your expenses and increase your income.  

@Rich Zellmer mitigation can in some instances help quite a bit and sometimes reduce premiums ~80%.