Please be gentle; I'm new at this and it's pretty complex :)Structure / Legal Details- we'd establish market value through a combination of comps from local real estate agent and an appraisal- attorney would establish all required "arms length" aspects including a mortgage at a minimum standard federal rate- LLC would pay us back based on a standard promissory note over 30 yrs Pros of selling to the LLC (I think)- A sale now would be the only time we'd be able to take advantage of the cap gains exclusion on this house bc we won't qualify for the "live there 3 of 5 years" rule due to the timing of our lease and our last time of residence. 

It's your regular bracket rate capped at 25%. 

However for MTRs, we typically pay for utilities with the caveat of a monthly cap.

Basically.....You invest the $50k-$60k up front for a single-family build or $100k for a duplex build.BTR company creates an entity together to own the asset.BTR company secures lending and builds out the asset over the next 6 months.Once it’s complete, BTR company refinance out and you get your $50k back + 16% at that point (or $100k + 16%)You retain 30% equity in the asset going forward (and therefore 30% of the cash flow or profit upon selling)Exit: 6-7 years once BTR company packages it and sells it to 4.5 Cap rate to Wallstreet. 

My rules of thumb have been:- $650/unit for 2000s or newer and $250 for cap ex- $750/unit for 1980s-2000s and $275 for cap ex- $850/unit for 1960s-1980s and $300 for cap exThere is definitely some nuance here, but let's assume these properties have had "cosmetic updates" throughout, but have never been full guts.

NOI: $49,536CoC ROI: 16.57% / CashFlow: $1488/moPro forma cap: 8.26%Purchase cap: 11.79%Check out breakdown below 👇🏾 https://www.biggerpockets.com/analysis/rentals/6c76954e-deb6...

The cap rates are just for place marks, interest rates will help. 

Conversely you are assuming the risk of maintenance, cap ex expenditures, and rising costs like insurance, taxes etc.

The capitalization rate, or cap rate, is an invaluable metric that quantifies the expected rate of return on commercial investment properties, like apartment buildings.

We analyze the entire market simultaneously and sort by cap rate.