Insurance also doesn’t protect you from misunderstandings, especially those made in writing and email.

D'ya ever misunderstand what someone said and take actions based on what you (thought you) heard?

Apologies, maybe I am misunderstanding? 

I would never aim to leave that kind of money in the deal.Let me know if I'm misunderstanding you. 

My apologies for misunderstanding, nut I always use real properties for my examples as well...for the same reasons as you.3 - What other "large cash flows" are you talking about?

To me, it seems the cost of legal defense would be the same regardless of whether I own the house directly or through an entity unless I'm misunderstanding something.One other thing that came to mind is whether it would be possible to own the home directly without an entity but still have an entity that I use for managing the short term rental aspect of it? 

Call the tenant and say "I hear there was a little mis-understanding the other day, can you tell me what happened?"

. :)  This is due to you omitting important assumptions and also to partial misunderstanding of the tax rules.Before you gave your example, your opening question made sense and was actually insightful, thumbs up.

I might be misinterpreting or misunderstanding your situation.

Just so I'm not misunderstanding I'm getting a different number than you:Buy @ 223 + 7500 in loan costs + 40K reno + 5k closing + 1K stops + 9900 commission = 286K Sale price of 330K - 286K = 44kAm I missing something?