My tax professional is stating that I would need an appraisal to show the lot/structure are valued at $400k if I try to claim $200k as a donation.

and that was owner occ.. todays rates are pretty normal actually. what you can do if you want though is find a really good HML and let them place a loan for you making 10 to 12% while your wait for things to change to a situation that you feel you want to move forward be more net return than buying a rental thats for sure. of course no tax bene's but there really is not that much tax benefit on one rental.. so just some alternatives. 

The same thing you claim on your tax return for your properties.

@Fulati PaerhatiA 1031 exchange is a powerful strategy to defer capital gains taxes and grow your rental portfolio.

If you think ahead, you can minimize recapture with the right tax planning.So what is recapture?

Be sure to hold a hefty reserve to handle on-going maintenance, capex, taxes, and insurance.

Note that I live in the Netherlands, which has many tax laws.thank you 

If you were able to increase the value of the property significantly after the rehab, then you could bring the deal to a community bank  to refinance and take the hard money lender out.You keep all the equity and don’t have to file a partnership return for your annual tax return, which can be costly.  

Then rent the bigger home out using a property manager, allowing her to possibly cash flow and maintain that asset and let it continue to grow in value.Encourage her to consult with a CPA or tax attorney to explore the best strategy tailored to her situation.

Taxes/Insurance- depends a lot on where you are located.The homes themselves- POH or TOH?