If let's say one of your contingencies was not met then like an inspection that revealed structural damage that you could not come to a new agreement with the seller on, then you would both sign a document to release the earnest money so the deal would be dead and you could get your money back.As far as other costs, there are the normal costs in the transaction like paying an inspector, lender fees and such.

If you want to see the contribution on the LTR P&L, you could create an other income account for the mortgage contribution ("Mortgage Contribution", for example).Your original idea of booking draws/contributions between the two activities is fine, but it doesn't inherently tell you what the transfers are for, since you could transfer funds between the two activities for any variety of reasons.

Unfortunately, lots of municipalities do NOT like Self Storage for a variety of reasons.However, if you can make it into a Mixed Used of sorts, Storage, office space, & so forth, you'll find those municipalities to be much more apt to work with you.  

They offer a variety of educational materials and advisers who get no compensation and push nothing on you.

This is helpful for a variety of strategies being used.

The trouble starts about 3 months in, a random inspection reveals the tenant has 2 dogs and 5 cats, we have no pet deposit in place, and the unit is completely trashed. 

Here's who I would recommend (3 different size/price ranges for a variety of investor types).

@Ricardo Taboada Lenders approach construction loans like this in a variety of ways.

It takes a variety of skills and you may not have what it takes.

It is in the Palm Springs CA area has a lot of good variety in travelers but some of the surrounding cities have better reg’s