First time posting and getting into the investment scene, I currently have a single family home that was my previous primary, and looking into purchasing my 1st true investment property, trying to find some advice on the financial aspect of the purchase, here's my scenario;Currently going through pre-approval with the builder and I do have liquid assets enough to cover the downpayment for the property (40k) but I do have a car note (41k, 800 monthly, extra 500 to principal monthly) and a Patio upgrade (25k no interest till March 2025).

Assuming a current typical interest rate of 7%, principal and interest will run $536 a month.

Thus your asset is appreciating (building equity) every principal payment you make. 

The examples are as follows:Example 1.Taxpayer A has owned and used his house as his principal residence since 1986.

Bankruptcy - It is theoretically possible that you may lose your interest but you should no lose principal if you get paid via the bankruptcy.

I think it's important to start with this - is your 250k debt what you owe in principal on the mortgage on your home or is this separate debt (credit cards, cars, medical, student, etc)?

Hello, is the Mortgage principal included in COGS?

This will also help when you file 1099s to report the proper amount to the IRS and send a correct 1099 to the PM for their PM Fees and possibly any Advertising or Repairs they may have doneFor the mortgage you will split it like you have it except the Mortgage will split to include the Principal amount to the Liability and the Interest expense. 

If some cause of action were to arise, the exposed party to litigation would be the legal title owner (in this case the LLC) and any savvy litigation attorney would also name the principal or managing members (in this case, you) in the lawsuit.

If I decide to take the loan out I would pay for the property and have tenants pay the monthly on the HELOC and have the cash flow if any go into the principal.