There are many investors who buy at these HOA auctions, even with negative equity, purely to rent them out until the bank forecloses….it’s purely a numbers game, how much to pay for how much per month for some estimated term of ownership until the bank forecloses.  

So the property will just sit until then...and again that was the sellers decision after hearing and seeing their listing presentation, marketing plan, pricing strategies, etc to hire that agent...that's purely on the seller, not the agent...

If the property sells in 3 years at a gain of 100k, it will likely be a capital gain unless the partnership is a dealer.Part of the gain calculation should be proceeds allocated to the land interest and be pure long-term capital.The amount allocated to the building will consist of 1250 recapture and unrecaptured 1250 at 25%.The depreciation is an ordinary deduction that would be lumped in box 1 of the K-1.There may be 1231 and 1245 if they cost seged.These amounts flow to your 1040 on Sch D and 4797 among others.

You could avoid that by being a pure intermediary and putting people in contact with him and they should judge the opportunity by themselves.

And they are dang motivated to clear those costs, and than it's pure profit from there so they want to do the best they can.

But that's just me.Additionally, from a pure bookkeeping standpoint, those types of services force you to open an account with them so that you can receive the payment. 

If it's purely cosmetic (paint, flooring, etc.), you do not need a permit.

Or is this purely an investment?

Now my house hacks are pure rentals. 

Just for information, I was speaking purely for SFH