But let's say she had shoved furniture into the attic, on top of the water heater pipes, that eventually leaked through the ceiling & created a repair that cost $500.

@John Wallace This is in relation to the deductibility of interest on the borrower's individual income tax return as an itemized deduction (Schedule A).If the proceeds from an equity loan are used to purchase another investment property, the interest will be deductible against rental income.We have to apply the tracing rules when determining the deductibility of interest payments.

@Joanna Lenn The general rule is that putting appreciating property (e.g. rental real estate) inside of a corporation, whether S Corp and C Corp, is a no no. 

When performing a quick preliminary screening on those websites (i.e. to exclude obvious bad deals), do you usually use the 50% rule (or similar % rule) to estimate expenses?

@Kyle Jiron You raise many valid points especially about creating a thorough scope of work, concrete timeline and contract value.

Some use the 70% rule. 

Very generalized rule of thumb, expenses usually land around 50% of gross rent.

Can I create a new lease with the new tenant while current lease is still valid ?

Sounds like you'd be doing better than the 1% rule and could potentially have a small down payment.

You can't go back and change it after it has been created.