Quote from @Lisa Albright: Hi All,Newbie here, just a quick question we are building an addition on our second home, we have a primary residence, and two rental properties.

At the end of the day; you need more money to do something like this.MAX LTV on new builds is 80% LTC, Meaning if the build is $550,000 and Land is XAdd ($550,000 + x ) * .8 = LOAN AMOUNTYou would need to come in with MINIMUM 20% of the cost in addition to closing costs and reserves, $80,000 is not going to cut it for this project.

Here are additional comments:1) Buying out of state removes any local knowledge you have from assisting in your success, including knowing areas, people and costs. - We always recommend buying your first rental locally if possible and DIY managing to learn as much as possible before investing OOS.2) Lots of crooks and incompetents in the PMC world:( They both cost you money.- As already stated, you'll have a small portfolio.

Additionally, we have developed templates for tracking key metrics that we require our PMs to fill out weekly. 

These are professionals with additional training and a stricter code of ethics.

Thanks for any additional input you have time to put forth. 

However what happens when the tenant vacates and now the unit has to be turned over/takes a few months to find a new tenant and during that same period of time the sewer line goes and you get hit with that $15,000 cap ex expense in addition to the vacancy and turn over costs.

Additionally you can do a cost segregation study and get a lot of depreciation benefits to offset the rental income (and potentially other income).  

The decision to do a cost seg generally comes down to whether or not you can actually benefit currently from the additional depreciation.

In addition, you want a separate bank account for the rental property to separate it from your personal accounts.