Proper structuring with professional guidance is key to achieving both parties' goals.This post does not create a CPA-Client relationship.

Hey Becky,When you sell the property, the LLC will still technically own the property until it is formally restructured, so you will need to amend the LLC’s operating agreement and update its ownership structure to reflect the change, ensuring the absent partner’s interests are properly dissolved, and taxes are handled accordingly.

The exterior we removed all sheeting and replaced everything and installed vinyl to update it.

That way you are training him to go through the proper channels.  

On the surface, it appears to be a straightforward role, but it becomes far more challenging when faced with issues like non-paying tenants requiring eviction or broken systems that haven't been properly followed.As a self-managing property owner, it is absolutely doable—but success depends on treating it like a business.

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

If you purchase a newer property that has been recently and properly renovated, you may consider using a lower percentage.The biggest impact on your cash flow will come from the property’s location.

They don't build a proper reserve, failing to account for turnover costs, vacancies, capex, etc.

Finding the fixtures you want installed at the hardware store and pricing them is a must.

With proper planning, this can be a great investment!