I take a mortgage out for 300k now and start to pay it off while I improve the property.

My net profit will be around $50K (purchase, sale, and improvements costs included) but the tax is 15% of that, isn't it?

Have you looked onto using a PPI - Purchase Plus Improvements mortgage?  

Current research leads me to think that the right angle is inadequate protection of the collateral by the owner (no insurance, continued decline, no evidence of effort to preserve or improve the collateral).

If you have stabilized the damage, you can present the insurance carriers with these details in hopes they see the property has improved form a vacant fire damaged building.

I'm wondering about using the rule in 26 US Code 190 to expense, instead of capitalize, costs to improve accessibility, whether it's ramps, widening doorways, etc.

Unit 1:3 bed 1 bath/ rent $1065  Unit 2&3: 2 bed 1 bath/ rent $940Insurance $1600, taxes $6000Current lease has OWNER paying for water - $2900 ( would have to suck it up until the lease is over ) Condition of the house doesn't appear to be too bad and in my opinion these units are under rented but of course wont pay for what COULD be, just saying that if these numbers work at all there is a chance of improving them.Obviously want to factor Vacancy, Capex, repairs and property management.

After you close on an improved property, change all exterior door locks and contact your insurance agent to get a new property covered.  

We pay off the HELOC loan when the improved property is complete and will appraise at market value. 

the court gotta improve the system. people live free for their whole life by doing this every 6-10 months.