When the snow melts awayDo the Cubbies still playIn their ivy-covered burial ground.When I was a boy they were my pride and joy But now they only bring fatigue To the home of the brave The land of the free And the doormat of the national league

@George JanThe original 50% rule states that it covers all expenses, both vacancy/loss to rent, operating, and capital expenditures one could generally expect.

Be sure to keep receipts for these expenditures if they decide to fight you on it and if you are having their items removed, pay someone to do it.

I've budgeted some money for extra HVAC expenditures (5k committed, 3k overruns), unexpected framing, etc. that an inspector might see.

Cash flow is the name of the game as we RE investors incur real expenses month over month and we rely on margins to cover those expenditures.

You should also keep a tax diary that explains all your expenditures.

Waiting until the end of the year to consider any tax consequences can be a huge mistake especially if you are buying and selling property, do a 1031 exchange, have involuntary conversions, or need to make any major expenditures.

Here's some numbers:GOI (minus vacancy) = 21240NOI = 10620 (50% rule), however, because everything is new, NOI could actually be near 70% with no cap expenditures in the near future.Cap rate = 11% minimumcash on cash return = 25%I have a side deal with my brother/partner where he would be property manager but would forgo any payment in lieu of earning equity in the property - I can explain more if anyone is interested.

Capital expenditures are evenly split (this seems like it could be problematic to make these determinations).3) Obtain a straight 5-10 year loan from a private investor, and you keep all the profit and risks above the borrowing costs.4) Obtain a 5-10 year loan from a private investor at a lower rate, and you and the investor split the equity (net sales proceeds minus note balance) when the property is sold in the 5-7 year time frame.5) A lot of the big turnkey companies are combining (1) and (3) by selling the rental to an investor and matching the investor with a private lender that they’ve cultivated.Obviously, option 3 is the only that that is just like dealing with a bank.

i live in ca so i know i would have to foreign file here in ca. im sure it will be an extra expense having a foreign llc but am willing to overlook the extra expenditure if it will ultimately protect my assets BETTER than what a california llc can do...looking forward to some words of wisdom. thanks in advance