Selling a house with these Letters means it's a standard sale and you, the investor, are free to make a deal and buy the house without court approval.

If you are 100% certain and the data backs you up, I would probably invest in slightly higher end (by existing standards) homes, as those will most likely be more desirable as the higher income neighbors move in.

Can I still get tax deduction on the expenses? 

Do we get same tax deductible from mortgage interest and property tax we pay every year? 

If we fly over multiple states looking at property from thousands of feet up do we get multiple trip tax deductions?...........................

I have a 529 plan for each kid that I contribute the maximum amount of my state tax deduction.  

 $5,000 (could go with cheaper laminant and save $1,500)4) Gut the two small bathrooms $7,000 (Replace bisque jetted bath tub with white standard tub, reframe leaky tile shower, replace vanities/ toilets.)5) resurface kitchen cabinet doors $1,6006) granite counter top ~$3,0007) Remove structural wall separating living rooms $2,0008) GE appliances $2,200There is other work to be done (HVAC, foundation, paint etc.) but items above are the ones with potential for cost savings. 

If they put down the $100,000 they will get to keep all of the rental income (minus expenses) but pay more tax because there will be no interest expense to deduct.  

Since you are splitting profits, it sounds like you will need to file a partnership return and be issued a K1 with your share of the profits - however these profits will not be subject to SE tax for you personally.Additionally, any business expense you incur should be deducted as "UPE" or unreimbursed partnership expenses on Schedule E - that is only if you are filing a partnership return.

The property is a standard apartment..