Depreciation qualifies as a business deduction.You do increase the chance of an audit with an amended return.

(TENENTS ARE IN ONE YEAR LEASE TO EXPIRE 1-31-19).IF I PAY OFF THIS LOAN NOW, CASH FLOW WILL INCREASE TO $897 A MONTH.I DO NOT WANT TO SELL HOUSE.HOUSE # 2BOUGHT IN 2014, PAID 220KVALUE NOW IN 2018, VALUE IS ABOUT 335-345KBALANCE ON LOAN IS $151KLOAN RATE IS 4.375, 30YEAR FIXED RATE SINCE TIME OF PURCHASE IN 2014.AT THIS MOMENT, CASH FLOW IS $200 A MONTHTENENTS ARE MONTH TO MONTH, HAVE BEEN THERE FOR 15MONTHS,  I DO NOT WANT TO SELL THIS HOUSE.  

Maybe increase your marketing budget, change your content or try a different strategy all together.Unfortunately marketing effectiveness changes rather quickly nowadays.

I love the idea of getting an FHA, 203K loan and immediately fixing up as much as I can right away to immediately increase rental income. 

I have a lease renewal on April 1 for one of the two units where I cover the oil cost … on the basis I do the conversion in the spring, I’d subsequently be tasking tenant to cover their own nat gas bills going forward (starting this coming winter).

John, if you don't mind giving a few more moments of your time, with the increased expenditures, how would you adjust the offer to the owner?

I would not have him pay for it, just increase the rent.

Look for areas with increased employment and population where vacancy rates are dropping.

Right now you should work on increasing your savings for when you graduate and get a full time job you are ready to jump. 

The items in blue are calculated based on the other data.I took some sorta educated guesses for things like yearly increases in taxes, rent, expenses, insurance, and appreciation.