LLC-A deducts the 10% management fee, while LLC-B reports it as active income, subject to self-employment tax but eligible for tax-efficient salary and distribution strategies.Ensure the setup has a clear business purpose, reasonable compensation, and documented management services to avoid IRS scrutiny.

I expect a company makes most sense, which leads onto my next question. 3) Commercial Mortgages - Has anyone made the jump from getting financing based on personal salary to financing based on the cash flow from the deal itself?

Your looking at this really cool and unique position your in, and focusing on it as a problem. 

This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.While the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall loss.

So the one's on the sidelines that did not get involved, and or are not coming from a position of strength--- now no longer can invest. 

Unfortunately, given current and foreseeable prices and interest rates, I will not be in the position to buy anything else anywhere I’d want to go. 

While the debt would whip out most of the profit for 'x' amt of time, it would seem to be logical to take on the risk at a net zero income for x amt of years if after that point, the cashflow is all positive.

I’m not looking for a step-by-step guide, but I know I’m not the only one in this position.

We pride ourselves in keeping the forums positive, helpful, and focused on real estate (please, no politics, religion, etc.).

:Quote from @Jimmy Lieu:Have tons of examples of deals that hit the 1% rule and positive cash flow.