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.

Fully understand the land development process.

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.

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.  

Not all the section 8 inspectors understand this.

@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.

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

Although this might seem like a super exciting way to “get out” of your current situation, please understand that REI is a very competitive and difficult business.

Maybe some other odds and ends that come along with the install other than plumbing.

Let me summarize to see if I understand the situation correctly.You bought a 5bed/3bath in a nice neighborhood.