The most important rule is to have the cash flow of the new property be able to pay all its expenses, mortgage, AND the line of credit back.

Even if you rent the house for $2,000 a month, you will still lose because of maintenance, vacancies, and the expensive mistakes common with newer investors.You can borrow up to 70% of the equity.

But they were selling an expensive house in California and had horrible credit.

Profits during the partnership can be shared based on the agreed equity split, with income and expenses reported via K-1 forms. 

This is not for your average JOE.

There are also 'mezz' lenders (typically for larger transactions) who will cover up to 90% CLTV and require you to bring the remaining equity to the deal, and additionally there is Gap Funding in the form of unsecured personal debt.The latter can potentially be the most expensive option, but allows for true 100% financing as there are no restrictions for how to use these funds, as they are unsecured, and generally obtained through personal credit, income etc (since there is no collateral for obtaining these funds).

That being said, it is another part of your property that you can use to generate income and in this area you can hit the 1% rule before expenses.

Since STR “lives” on reviews, being “right” because of the contract the guests signed might be the most expensive “right” you’ve ever experienced.So what’s left for the “wanna be” STR investor in today’s market?  

Having toured some of the most prestigious, expensive and historic estates and properties from Brookings to Astoria, there is still considerable investment opportunity at the very high end of the luxury market.

@John Reagan Johnson hope you don't mind a PMC answering, but most of our clients hire us because:1) They live out of state and don't have time & expertise to remote manage2) They don't have the time to manage3) They don't feel they have the necessary expertise and/or don't want to risk learning as they go and making an expensive mistake.Go read Kiosaki's Cash Flow Quadrant book.