I would guess if you do have 500k in equity you could probably outproduce the cashflow in most markets oustide of CA, and could possibly diversify into more than 1 property.Just some food for thought.

This practice enables the Tax Commissioner to maintain a very high collection rate because the investor absorbs the risk of loss (but also the potential for profit).

Mainly, the LLC prevents a loss from spilling over into your other investments or your personal finances in many cases (though not all).

I would rather absorb the loss of rent than deal with any more passive aggressiveness from the current tenants and lose out on good leads as a result of that.I really appreciate each of you for taking the time and clarifying things for me.

One thing to note, 1 of their pictures is literally just the indentation in the carpet from where a trash can, water bowl, and food bowl always sat.

Unit 1 will lose this small storage.We settled for $ 250 rebate per month for the loss of this small storage.And $ 700 rebate for the construction.

@Bill HamptonNot a cpaBut you should have a profit and loss statement that shows all your profits and losses.

I made some elections about grouping by not grouping as I expanded and didn't understand the consequences (making material participation easier/when passive losses can be harvested/ease of filing) of that at the time.Also random question but do you have a sister Nicole?

They had issues performing because they didn't underwrite expenses correctly and as a result they ended up carrying alot of debt and losses.

Be sure you and your friend are receiving annual forms 1098 associated with both loans and that you discuss with your respective tax advisors.You will purchase hazard insurance in your name, listing the underlying lienholder as 1st loss payee and your friend as 2nd loss payee.When structuring a wrap, it's best for the wrap term to be longer than the term for the underlying loan and of course the monthly P&I payment to be higher.