For example, you could create a weighted structure where a percentage of profits is based on cash contributions, and another portion compensates for rehab or management efforts.Rent Payments and Tax-Free Profits:If you structure it as an owner-occupied property, the rent you pay could be shared proportionally, but tax-free gains on resale may only apply to your share, as you’d be the owner-occupant.

Weigh the long-term benefits of the low mortgage rate you have versus selling and getting $500k from a sale exempt from capital gains tax.

Credit is a factor as bad credit may limit options, or may have the lender require you to put 10 or 20 years of taxes and insurance into escrow. 

An annual business tax as a hotel of $50 and collection and remittance of transient occupancy tax of 12% from renters is required of all short-term vacation rental operators.

We pay all of our expenses out of that which includes: broker split (my brokerage takes 22% of the total commission, this varies by brokerage and is typically anywhere from 5-50% depending on how much support the brokerage provides and whether or not the agent is on a team), transaction fees, transaction coordinator cut, income taxes (15-20% of what's left after broker gets their cut), errors and omissions insurance, MLS fees, board of Realtors dues, required continuing education costs, vehicle and vehicle insurance plus maintenance, repairs and gas, health insurance (also health insurance for the family if they are the sole breadwinner), technology fees, desk fees (office rent), marketing materials, advertising/ lead gen, etc.

You want an investment that pays for itself, including mortgage, taxes, insurance, maintenance, and even some money set aside for a reserve to cover vacancies and capital expenditures.

@Nicole GrazianoI recommend that you have a consultation with a real estate tax accountant regarding your taxes.Bigger Pockets is a great place to find a real estate tax accountant. 

If the purchase is done in cash, as you mentioned, they’d have more flexibility, but they’ll still want to carefully consider the tax and legal implications of the subsequent sales.I hope this helps, and good luck with your client’s deal!

Someone can be a brilliant tax person but horrible to work with, and also vice versa. 

Thats $7700 a year NOT including my accountant/Tax prep.