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.

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.

Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable).

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.

Also 4th quarter of last year Packwood and county officially did discuss potentially regulating STR's by either limiting numbers or adding a tax to cover increases in local services that are needed. 

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!

Lower property taxes, affordable housing compared to LA (CA buyers are usually cash buyers because what they net from their smaller home in CA can get them a bigger home here, often covered by what they net from their CA sale), allergies (smog), and politics. 

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.

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. 

I was just reading Mark's book "The Tax & Legal Playbook" this morning and it specifically had a "critical warning" (page 31&32 in Chapter 3).