Judicious use of leverage (debt) when the property will still cash flow positive after debt service; when there’s enough equity left in the property to refinance if advantageous, and when sufficient reserves are held to cover vacancies, recessions, and unexpected repairs5.

With this option, we're wondering if it's better to offer it as a 3 bed 1.5 bath with 2 bonus rooms (which we live out of), or rework one of the rooms into an actual bedroom to make it a 4 bed.With either option, we're also wondering if it's best to have the cashflow of our current house to offset any unexpected expenses, or if we should pay extra and try to pay off our current house as soon as possible.

(Fortunately, we were insured)Emergency Fund: Always have extra cash for unexpected events.Tenant Support: Keep good communication and support your tenants through tough times.Final ThoughtsThis July 4th was a disaster, but it’s also a stark reminder of the unpredictable nature of real estate investing.

So....... with my previous CPA (who has since unexpectedly retired) we did a cost segregation study on an asset that was placed into service in 2021 which broke down the bonus depreciable items into 3 buckets, a 15 year bucket, a 7 year bucket, a 5 year bucket and the rest would be on a 39 year straight line depreciation schedule as it is a short term rental.

Since you mentioned retirement its always good to be prepared for the "What if factor" meaning "If" something should happen or come along unexpected.

To make a really long story short, I have just completed a Short-Sale of a single-family home a business partner and I built in Horseshoe Bay, Texas, right outside of Austin, Texas.Our Operating Agreement states that we are to split 50%/50% of all expenses within the business and treat any unexpected monies due as loans and paid back equally amongst the partners.

A common rule of thumb is to budget around 1-2% of the property's value annually for maintenance.Management Fees: If you plan to hire a property manager or use a property management service, factor in their fees as part of your operating costs.Contingency Fund: Always include a contingency fund in your budget to account for unexpected expenses or fluctuations in operating costs.Financial Modeling Tools: Consider using financial modeling tools or spreadsheets designed for real estate investment analysis.

My personal opinion is to not put anything down and instead save for closing costs and unexpected but expected repairs.

I flew in unexpectedly to confirm and subsequently fired him. 

The cost of this ~two-hour mentorship was the price of a nice sushi meal (which the unexpected mentor offered to split.)