I like helocs on primary residence because it is designed for short term use and the payment gets allocated to a project that will make money in 6 - 12 months. imagine if they did a deal with you, and after 12 months or so you refi or sell that deal and the family member gets their 600k back.

As of this writing, the S&P 500 was down a little over 17% year to date, and in the same period, my passive investments have been kicking off 5-7% monthly distributions, one of my passive investments went full cycle in just 14 months producing 80% returns, and I sold my long-term rentals that produced about 20% returns annualized over the past 2-3 years.Bottom line: I’m very glad that I invested heavily over the past 10+ years in the real estate space, and I believe that everyone should have at least a portion of their net worth in the hard, physical assets like real estate.I’m not suggesting that everyone should have over 50% of their net worth tied up in real estate investments like my wife and I, but real estate investments can and should part of your diversification strategy to make sure 100% of your investments are not subject to the volatility of the stock market.I’ve recently started tracking my investment allocations across the following categories: stock market in retirement accounts, personal residence real estate, passive real estate investments, cash and autos (anything with an engine – Yes, that’s a Dave Ramsey’ism).

In most single family investments, 50% of rent should be allocated to expenses (taxes, insurance, maintenance, capex, PM, vacancy, etc).

I'm guessing I allocate money once I see a receipt for the supplies, maybe a portion for the labor if he needs it. 

@Dave Rav I have asked several bankers that question and it comes down to allocation for their bank.

With that being said, when materials and labor went parabolic, the builder stopped the projects only to then find out from them months later that they were not going to lose more money and that we either had to wait until the contracted prices they allocated for labor and materials came down or eat those costs ourself…..we chose to wait.

But the values and type of property would be fine.And while the loan doesn't matter with a 1031, the proceeds for the down payment on your purchase can come from a 1031 in an SBA 504 loan and 7A loans but you need to make sure it's going to the purchase of the real estate and beware the allocation to FFE and working capital.

I was a self made millionaire at 34, I retired at 38, I have a hard time allocating all my own money let alone someone else's.  

My CPA has instructed me that the auto expenses (at least the proportion used for rental activities), overhead such as office supplies, software, tax preparation, and other items which occur to operate the rental properties (AS A WHOLE) are expensable on Schedule E relative to the activity (e.g. based on number of units per property) by "cost accounting or cost allocation". 

Seems low if this is the only payment for cleaning an STR.I'm assuming there is no expense allocated for marketing, etc because you are planning on using a rental management company.