I know it sounds counter intuitive, but you can increase your passive income by claiming everything legally possible as capital expenses. 

It saves the expense of ever getting a subpoena requesting that we provide all email related to a certain item; if you do not have it, you cannot provide it.I suspect your response contains simple facts and conveys no opinions. 

The other factor to consider is I would lose the HELOC on the house which I have used as my reserves should a large expense (like a roof or furnace) arise.If anyone has done something similar, share your story. 

All this means is that IF your AGI is under $150k AND your rental generates a loss on Sch E  AFTER accounting for depreciation, expenses, ect....ThenThat loss will be allowed to offset your earned income. 

The slope of the land and how much dirt to be moved also comes into play as it can get expensive to level for site work.Additionally inventory levels of similar locations with vacant buildings where developers or tenants can go in cheaper and faster might be competition unless you have one of the best locations in the area.Basically what I am saying is that there is a lot to this and you need a specialist to help if you are trying to extract any additional value out of the property versus it's current use.

Here is some back ground.Tax Certificate, Former Owner is Still in Possession, Bought at 2018 Sale, Residential Structure on PropertyI was going to add casualty insurance to the property but was unsure if I need to wait for Tax Deed for the premiums to be included as an expense with redemption or if I add insurance with a certificate and owner is still in possession if those premiums+interest will count toward an expense at redemption.Any help would be appreciated.

What other major expenses should I be factoring in? 

I usually find appliances a couple of years old for dirt cheep, far less expensive than repairing major parts.

So, if you did 50/50, you would split the monthly profits (cash flow after operating expenses and debt service) and the proceeds at sale. 

There are now private market flood alternatives (not part of NFIP) that may or may not be better or less expensive.