Why is the renter paying your down payment and agreeing to buy at a $30k premium in 3 years, plus shelling out an additional $500/month until then. 

I am currently in a house rehabbing and flipping situation not by choice, but by necessity and it has proven to be a very valuable experience.

We pay $750 extra towards the mortgage and have annually made $5000 or $6000 additional payments to the mortgage (4% 30 yr fixed). 

Thanks @Chris Brown once again appreciate the valuable feedback, that draft of the HS rezoning is exactly what I was looking for, very helpful! 

It is an additional tear down cost to get the land grade ready.

With the work that I have been doing (new construction, addition, full Gut, Renovation) my costs are roughly $170/sqft (depending on finishes, this was a really nice finish look) $120/sqft , $80/sqft, $70/sqft... in that order.

I work as a software engineer but I'm looking to grow a real estate portfolio to build additional income and wealth over the long term.

Those items are currently deductible and, in addition, not subject to depreciation recapture later on.Ryan, it is common for CRE investors to use cost segregation to eliminate passive income and not uncommon to use it to offset earned income for those with the real estate professional status that you mentioned.

Michael,I agree with @Eric Weireter and @Christian Hansen.. with an additional thought/caveat that you are going to be buying at or towards the top of the current market cycle (in my sometimes-humble opinion).

@Clyde StackhouseRenovation expenses prior to having the property "rent ready"should be capitalized and depreciated as an addition to basis.