Same for 2-years of job/income stability.Tenant Default: 10-20% probability of eviction or early lease termination.Section 8: Class C rents usually meet program requirements, proper screening still recommended.Vacancies: 10-20%, depending on market conditions and tenant screening.Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.Class D Properties:Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months.

An office/in-person audit would require a face-to-face meeting, which you could request to have your CPA present for.

What is the best way to handle it so that both LLC members have a skin in the game?

To meet his burden of proof under IRC 7491, the taxpayer must comply with the recordkeeping requirements of the regulations.

For example: If a tenant applies for a $1,000/month rental and they have gross monthly income of $3,500 they meet the first criteria, but when applying the second criteria you find they have a $500 car payment and $250 child support payment.

Hybrid Structures: Some deals include small interest payments that meet AFR, while other portions are structured as deferred payments.

Hey Samantha, Detroit can be an amazing market.Two things I'd recommend:1) Google the "Renegade Detroit Investors" and start attending their monthly meeting.

I'm retired and don't want to play the, Let's have a meeting before we have the meeting.

@Ryan Blackstone I'm interested in these meet ups.  

.- Material participation rules still apply: If you meet the IRS material participation tests, losses from a short-term rental can be treated as nonpassive, allowing them to offset W-2 or business income.