Avoid common pitfalls like underestimating costs or tenant management challenges by planning conservatively and staying proactive.

I just don’t know DSCR loans are great ways to scale your business, but they're not without pitfalls. 

However, we have a lot of questions about pitfalls and unknowns especially with older properties, or if there is a better investment strategy since cash flow properties in our area aren't meeting the numbers we are looking for.

General Tips for ADU Investments in LA: Any advice on maximizing ROI from ADUs or common pitfalls to avoid when building and managing ADUs in LA?

What are the biggest pitfalls I should look out for? 

Acquire enough RE that it takes you or your spouse more than 750 hours a year and 1/2 of your time to manage.When you are a material participating RE pro all of your and your spouses’ RE activity becomes active, allowing you to offset RE losses against other active income.One pitfall of a RE Pro spouse if you are full-time W-2.

This allowed them to keep part of their funds liquid for their personal project while still deferring some taxes.Also, I noticed some great advice in earlier replies, particularly about HELOCs and the pitfalls of LLCs for 1031 purposes like @Maureen McCann explained it perfectly.

But might help others avoid this pitfall…when a mortgage is transferred between banks, I’m learning they don’t record a lien release with the county. 

Lease provisions in one place that are common and acceptable may not be allowed elsewhere.Overall its worked out for us but there's definitely some potential pitfalls.

I have been interview these folks and almost down to the right folks.What I am seeking from the community is experience from those that have done this and have been successful but also those that have pitfalls to learn from those to either not make the same mistake, or do what works.