This arrangement can benefit both parties if structured properly.Hard Money Loans: These are asset-based loans provided by private lenders.

It’s a tried-and-true way to build long-term wealth, with tax benefits like depreciation and the ability to leverage financing.

An additional benefit of a detailed engineering-based Cost Segregation Study is that it can increase potential insurance premium savings as well as provide support for the property tax appeals process.

It does not directly offset it, the mechanics are complex, but you should benefit from the $50k losses, resulting in no additional taxes from the sale.

@Fernando GuzmanFor Property 1, the $1,000 monthly negative cash flow could limit your growth, despite the tax benefits.

Financing the deal with cash and a loan from your brother helped you avoid traditional loan costs, which likely benefited your margins.One key lesson you’ve pointed out—always buying low and, if possible, getting an inspection is something that can save a lot of time and money.

And I feel the ideal portfolio can benefit from the diversification of both.I feel directly owned properties are great because they give me maximum control and the ability to tweak them exactly how I want.

There are just so many benefits to using an agent and letting the builder pay their fees. 

: If you’re planning to hold the property long-term, the repairs may not be as concerning since you’ll gain appreciation over time and benefit from consistent cash flow.

If you wanted to be super careful you could have an attorney write up a new easement and record it for the benefit of future owners of both properties.