- the property is based in Garfield Heights - and that my property tax will be much higher.More details: https://brickbear.ai/share/deal/1/583 Define "area not that great"......It's a high C type area.

According to our understanding:1) California does not recognize REP status, but we could claim it on our federal taxes, is this correct ?

(Loan paydown, tax savings, etc etc..).

If you don't, this is an advertisement of what to avoid.

@Jeanette LandI always recommend using a tax professional.

To avoid going through the same poor experience, keep reading.Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.It's often a case of not doing enough research, as they don't know what they don't know!

You can hear real-world examples of how others have built their investment portfolio and (hopefully) learn to avoid their mistakes.4.

Note that the diagram doesn't consider tax implications—that's another important factor you'll need to include in your decision.

Agreed - plus two additional thoughts:1) I always recommend having your CPA also review the drafted operating agreement for the tax issues. 

@Bradley Buxton makes a very good point to make sure to do your due diligence as you won't be an owner occupant like your in-laws.Last bit of advice: Because this is a friendly deal, you want to take your time to make sure you structure it in a way that maximizes tax and cashflow benefits for both parties.