I called the HOA President and asked if this was already paid by the seller because nobody mentioned a special assessment.

I would suggest talking to your CPA or get a good CPA to decide what tax structure you want to elect under. 

I have had the property for 5 years, but now I am financially in a position to afford to buy another unit, or two if I can.The current owner of said two units is the president of the condo association, and would pass on the property management duties to me, at a rate of $300/mo with the purchase of the units.

I've looked into doing variances for several properties I have, and in one, the local homeowners association president said "some people try very hard to get variances, and we try even harder to oppose them".

Roof, Electic, Foundation/Basement, Plumbing.

This may mean, for example, that you will elect to capitalize a maintenance item instead of writing it off in the current year, as that will help your reported income.

Again I apologize if I have forgotten something.Interior Features Wall/window air cond.CarpetTile flrsRange and ovenRefrigeratorExterior Features Elect. srvc avail.Public water supplyPublic sewer srvcHeating Features GasElectricUnit Features 12 total unit(s)Misc Topography: Public sewer srv

Other alternative is to treat it as a fixture and then elect the section 179 to expense it all in the first year

It is hard enough getting the deal, don't make it harder.Funding the ongoing rehab and holding costs can be done by whomever sends in funds and is reimburesed by the JV, of course you will need a JV agreement for all of this.Since you have not made any offers yet and are talking about future here, I would strongly suggest the following:Form the entity (if an LLC, and you plan to flip, then elect S-corp taxation elections) with each of you as partners.

Also if yes should I go ahead and elect my LLC to be taxed as a s-corporation?