Real Estate & Family: can family and rentals mix?

[John Olaore]

Hi! I’m new to this community (insert “what’s new” expression here). 

My wife and I bought a SFH (townhouse) in the Dayton Ohio Market over a year ago and rented it out after 7 months of occupation.

We have two tenants (one of them is my brother) paying $750/month combined on a $325 mortgage (insurance and PMI included). We have a $209/month HOA (smh... I hate spending that money so much) and set aside $75/month for repairs and maintenance.

To date nothing has gone wrong (wood being knocked on as I type) But I heard the phrase that family and Business should never mix.

1. Legally speaking can a family member function as a tenant?

2. What are some of your horror stories of doing Business (real estate related) with immediate family?

3. I now live in the Sacramento Market, specifically Roseville/Rocklin but would like to take advantage of the Dayton Ohio market by tapping into my brothers status as a NOAT (never owned a thing) and partnering with him on a house hack with a quadplex, effectively moving him out of my SFH but keeping him as a tenant in the new quadplex which we hope to 203B or 203k. Poke holes in this plan please, but understand that your holes are going to be used as learning moments to make this a success.