In lower-value areas like Sylmar, market values max out around $3.28 million, which results in a loss.The key takeaway?

It also keeps the door open for a cash for keys situation in case the tenant can't pay all of it.

The eviction process can be lengthy, costly, and may result in getting the property back in poor condition.To avoid this, you might consider offering a "cash for keys" arrangement.

Buying a turn key rental, in an area you know or knew well, with a property manager you've met and trust, in an area that is large enough for you to have other options to find contractors and property managers? 

And what is your price point and are you looking for turn-key properties or something along the lines of a "fixer upper"?

The key though is to find the right product type in any area you're considering as there are always good, better and best products in every market.   

In the end, it cancels out any benefit.Loss of Key Homeowner BenefitsIf you sell your home to an LLC or S-Corp, you’ll lose:$250k/$500k capital gains exclusion on selling a primary residence.Homestead exemption on property taxes.Owner-occupied insurance rates, which are cheaper than rental insurance.Substance Over FormIn tax law, the IRS looks at the substance of a transaction, not just the form.

Here’s some clear advice to help you navigate your journey.First, education is key.

Tenant shall be charged $[amount] to cover the cost of this force-placed insurance.The other lesson is that you should never hand over keys until you have proof the Tenant has met all requirements.

Cash for keys will be my first option.