At that point, you will owe the IRS extra taxes, plus interest and penalties that can more than double that amount.What allocation percentage is safe?

He bragged about the extra income.

In Cleveland SFH can charge tenants all utilities, trash is included with taxes so no extra bill here.   3. 

It may be necessary to work extra hours, get a side gig and/or consider a job change but it is doable. 

It give you the ability to own and manage multi units - typically better rent to price ratios than a single family home thanks to the added units, a roof over your head, and a start in RE investing.Rates have cooled down a bit and certain deals can really start to pencil out for househacks.

I always budget an extra 5-10 percent on the rehab for things you'll find during demo that weren't visible.

Property tax liens added  up to a substantial portion of the property value and of course is superior to the subject note.  

Could requiring proofs of works completed be added to your systems?

I will spend the required one year fixing the property, then refinance to pull the added equity out.

In fact if you added up all his claims, he would personally possess 95% of all wealth in the world.