@Felicia Walker, while I have limited experience using lenders on flips, I will say my experience mirrors yours: some require very detailed reporting of costs of completed work, some are a little more "general" accounting.  

The accounting aspect is a an additional thought I hadn't heard before.I know some people have used this strategy in an attempt to avoid triggering a re-evaluation of property taxes.  

this will help with the administrative tasks (e.g. yearly 1099, pay off statements, accounting especially if the borrower pays faster) as well as helping to provide a 3rd party proof of non-payment in case you need to foreclose.Be sure to use an attorney that specializes in Notes, not necessarily a real estate attorney, to draft the paperwork and protect your interests.Good luck.

This is a solid idea, I will discuss my options with my accountant, and consider it as I proceed along. 

As accountants on BP we cannot promote ourselves directly.

It's nice to know that you are taking into account the quality of life for your tenants and if that floor will benefit them.

I am in Property Management, I was going to ask if any of this was taken into account.

@Ruben GarciaI recommend finding an accountant that specializes in real estate taxation.

This may be a wholesale transaction, a duplex, or even a single-family house.Get a trustworthy group of experts together, such as financiers, contractors, attorneys, and real estate brokers.

@Gerald ChewI recommend finding an accountant that specializes in real estate taxation.