I was advised that he should create an LLC and then our two companies can form a partnership. 

I like it and the numbers look decent.Pro Forma is 7.21% and CoC ROI is 10.04%.However one of the tenants is late for rent ($1,000 in late fees this year), a smoker and their unit is hard to even be in.   

Create a realistic pro forma profit and loss statement to determine if this business has the potential to pay any more than you could make working a “no risk” job. 6.

Look up the courses taught by Justin Kivel, specifically the Pro forma modeling course and the real estate financial modeling boot camp.

Narrow your focus, stop buying properties, and figure out what you actually know really well rather than letting FOMO, spreadsheet calculations on faulty pro formas, and advice of strangers on the internet influence your investment decisions. 

Again, others might feel differently here.3) property level due diligence: (takes seconds to weeks per deal): here is where I drill in with the low-level details.a) pro forma popping: I examine all the assumptions, and see if they are overoptimistic or not.

Also most townhome developments are part of some sort of HOA and if there is an HOA they will definitely not allow you to form a condo within the bounds of their HOAFeel free to reach out if you have more questions!

There was also a failing retaining wall in the rear of the property that completely blocked natural light form a handful of houses, and was technically on the property line and a shared responsibility.

Of course, with all things, the answers to all these matters will depend on the circumstances.California tends to have more laws on the books and requirements and restrictions that it can be a good idea to form a CA LLC for out of state property so that you as a CA resident are covered, and to try to have your contracts fall under the purview of CA courts.

The numbers you see in pro formas or calculators often don't account for hidden costs like:-Major repairs and capital expenditures (roofs, HVAC, plumbing, etc.)