Is there a way to avoid a due on sale clause for my current property and duplex but still operate them as rentals and be taxed as a business?

Their whole goal is to front load the property with all these updates so that the investor can ACTUALLY cash-flow.

As long as landlords continue to operate out of fear we will never have answers.Document every thing, all conversations, and, as Greg suggests, be prepared for them to play the "emotion" card.

Residual Cash, Dividend Income, Interest Income, Net Income, Net Operating Income, etc.

You will need a LLC, EIN Number, Operating Agreement, etc. 

I think his 12% may be referencing his multi-family that he owns and operates, unless he's not able to pull out all his funding.

However, I don't understand how buildings are financed when the net operating income will not support the mortgage payment.

you can have a great property. but the Sewer main line is 2 miles away and you need a pump station or two.. this is where bonds are perfect.. and were in our state it stymies growth since you cant front end load the project with that much offsite.. you do get some SDC credits but you got to have the big money up front to do it then wait to get paid back with no interest.  

My current model, as an owner-operator, accounts for my time - here's how:  Each new tenant signs a list of repair estimates they will be charged for various turnover expenses as well as labor at $25/hr for anything not listed. 

Provides Operating Agreement.