So you have LP who makes investment then when it does not go right has no clue what to do @Chris Seveney then points out not only did they get wiped out but if there is significant cost seg taken there will be some pretty hefty tax due and the LP did not know if there was a cost seg or not..

Initially, this might seem like a great idea as you can maximize rental income by renting out bedrooms kind of like college student rentals.

But its more of a rarity than deal flow and she has no interest in coming on BP..

You usually pay less in taxes and you build your portfolio much quicker than taking that money out. 

@Eric Chappell Income Statement is nowhere close to a Balance Sheet.

Shouldn't be any extra taxes involved.

It was a gut punch to see the tenants whose income we were counting on mass exodus the building right after we closed Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

The ability to turn single-family lots into duplexes or even split lots for separate units can significantly boost rental income and property value.

Include an exit strategy, tax planning, and insurance to protect both parties.

As for the investing, I’ll probably be looking for a 3-4 family rental property to generate a little bit of passive income.