Most people do a regulation d 506b or 506cWith a 506b it’s considered friends and family as it’s people you have a relationship with but you cannot advertise and must provide audited financials With a 506c you can advertise but must only accept accredited investors

Before you decide against using/ afraid to ask a CPA, take a look at the IRS Passive Activity Loss Audit Technique Guide here https://www.irs.gov/pub/irs-mssp/pal.pdf.

Although my accountant is quite certain Merry Maids is likely exempt he says that you should always do it just in case your expenses are ever audited.  

If you do not build record keeping then consider regular audits on your management company and add a clause in the agreement that requires this.

Just make sure to save all of your receipts and save them electronically since receipts are required if you ever get audited.

If you get audited, it will cause serious pain.

Absolutely would recommend the midwest, we invest exclusively in the midwest and have hit an audited average of 31% IRR :)

Look at and audit the rent and exit cap sensitivity table or calculate it (along with validating rent comps) to ensure that the property will do fine if rents don't increase.Excess government actions have inflated everything, including rents, and they are just playing whack-a-mole by now smashing the interest rate button to course correct.

Everyone seems to have a slightly different mechanism of calculating the splits, so I would reach out to them and see if they can walk you through the calculation.We use an investor management platform that calculates the splits (to the penny), keeps an audit trail, tracks accrued distributions (if you are doing development or heavy value add), etc.

Special trust accounts that can be audited by the division of real estate are required.