If you can’t do a 1031 to a non-income tax state, figure out a year when you will have lower income and tax rates ar as low as possible.

.🔥 Why Co-Living & House Hacking Work So Well Together✅ Higher Rental Income Per Unit – Renting by the room typically beats traditional rental rates.✅ Lower Vacancy Risk – Losing one tenant doesn’t mean losing all your cash flow.✅ More Affordable for Renters – Competitive pricing attracts a steady stream of demand.✅ Built-In Community = Lower Turnover – Tenants stay longer when they feel connected.✅ Allows You to House Hack a Single-Family Home – No need to compete for pricey duplexes and triplexes!

Being a real estate professional allows you to treat the income as non-passive, allowing higher high income tax payers to pay less in taxes.

What's left after subtracting the expenses is your Net Income. 

@Christopher HeidrichRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

@Brittney Yang first red flag is it doesn’t sound like he’s that interested in long term holds but the primary reason for partnership is expertise in renovation and secondary reason is balance sheet and income to help get financing.Regarding reason one, I would offer to compensate him for his time in assisting you and have a very clear scope of what that responsibility is.  

Gross rental income divided by 2 (50% op ex ratio) equals net operating income. 

The only thing that makes these properties turn key is the fact they are move-in ready for a lower income tenant with low expectations.

@Kyle LipkoRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?