That is for ordinary income passed through from lower-tier partnerships, estates, and trusts, which isn't the fact pattern you're describing...Form 8825 is for rental real estate owned by a partnership or S Corp. 

Before you respond with "but I won't want to be a real estate agent," consider that in both your OP and in this post you are merely describing much of the job of a real estate agent ("market and bring a buyer to the table") but proposing a unique commission structure.

It'll be stronger once your 2018 taxes are done based on what you describe.

@Amul S. best way to describe it would be to say for example you wanted to have 100 rental units in five years so okay at the end of five years you need to hit that goal, so what goal do you want to set for year four that can build to 100?

Account Closed the property you described seems to be in a not so great area.

My letter briefly described that I was intending to occupy one of the residential units, rent the 2nd residential unit and rent the 3rd commercial unit.

@Michael Vest, There's been a joke in the 1031 industry that describes how long you need to wait to do a refinance after a purchase and completion of your 1031 exchange - "long enough to put one pen down and pick up another"!!!

I have seen it described as both - and lets face it, my PN income is way more passive then a Rental.I would also ask, what are the tax consequences for an early payoff of the PN - or NPN for that matter?

And I really would not call it investing.. to me its exactly what you describe in the title its running a business.. this just happens to be the note business...  

@Jay LeeWhat you describe is a situation that could happen to any landlord, really in any assets class.