We met the man that lived there for the past 5 years while he fixed it up for his brother who owns it. 

I am more interested to know the operational and legal ramifications of this set up though if this model is successful to improve the cash-flow and the value of the building in min 5-year time frame.  

The reason I viewed the Net Return based on down payment is because its a metric I have used to value other companies in the past.

My understanding is that since late fees cannot be assessed until rent is 30 days past due, the state views discounts to pay by some certain date as a late fee in disguise.Regarding the lease options or lease purchases, I am not sure how they're structured here as I have not been involved in any.

I was looking into a similar situation in Los Angeles this past year.

Where there is some additional questions are whether items like health insurance for myself and my wife (the premiums not the actual medical expenses) would be considered part of this overhead (in the past we HAVE NOT put this into the "cost allocated" calculations for Sch E but instead listed them in Sch A.

We're wondering if anyone knows an architect who's familiar with the process who can help walk us through the permitting process (we've done extensive renovations in the past, but never in this county).Also, would love to hear any pearls of wisdom from anyone who's renovated in SF (including working through the permitting process, anything you wish you knew before you started, regulations that are unique to SF, etc.)  

I am in Lake County which is about 30 mins to the east of downtown and this is the area that I stick too.

Here is how it works:Over the past 7 years the Vegas Valley has seen enormous growth in the housing market and home values.

@Cameron SilvaI’ve worked with oos investors in the past on similar type deals.