Most banks require 20% if using a Conventional loanAlso, there is plenty of material on Bigger Pockets that you can read, listen, watch & gain insight on how to go forward.  

When you replaced the hot water heater, did you opt for a high-efficiency heater with external ventilation and exhaust?  

For example if you hire somebody to do repairs you can charge the tenant but if you do the repairs yourself you can only charge them for the materials.

The only way that I'm aware that someone could get hit with a Sales (or Use) tax on a property is if they are the builder and didn't pay sales tax on the materials they bought to build the building.

We bought a lot of material in bulk, and got some better pricing.  

You need a specific take off for every piece of the house factoring material, labor and time.

These are guys that are really established in Atlanta and are pretty well known by people that have been around for a long time.http://www.streetsmartinvestor.com/John has had a property investment radio show in Atlanta for over 18 yearsJohn AdamsYou get course materials and of course up-sells.  

Be sure to take advantage of as many of the webinars, podcasts, and educational materials you can absorb here.

This includes direct labor as well as indirect labor, such as time spent shopping for materials or time spent maintaining the property once it is for sale.

Trouble is now arising in that member 1 took it upon himself to perform work not originally agreed upon, buying materials ( out of his own pocket) and paying labor.