They will check all the normal stuff municipal inspectors look for, such as detectors, leaks, missing or broken doors/windows/screens, etc. 

You can't deduct any thing while it's your home- and I would freeze depreciation for that time since it's being taken out of service for longer than normal renovation time for your purposes. 

I would want to hear a lot about the "why" and then a lot more about the "how", specifically "How could I, with normal income and no experience in MF investing, actively invest in MF? 

There's also the additional hurdle of cataloging everything you're furnishing, and any disputes you may have at move-out over condition, what counts as normal wear and tear, and things like that.

Otherwise just realize that with risk comes reward and it is totally normal to be nervous. 

Mende,A foundation leak is not normally a covered loss on the Homeowners policy.

They are pretty normal expenses but the attorney usually writes the checks for you and you just bring one cashiers check to the closing.

I normally don't get spooked by foundation issues, just treat it like any other problem I'll have to deal with.

Lots as a general rule trade at 25% of the finished homes value.. its a general rule but a 500k home lots normally go for 100 ish. of course that does change a few years ago in some markets you could buy 10k lots and sell 200k houses.. think OKC  TX those areas were new construction is built for a fraction of the price of other markets. were that can be inverse is say in an area like Palo Alto or SF peninsula were you may pay 2 mil for a lot and spent 1 mil on the house and sell for 4 mil  :)  2,500 sq ft maybe smaller. 

@Billie ChenThere is normally less competition for homes that need work done.Less competition = more built in value.With that said, if it is your first deal, you may want the easier one.