This immediately struck me as odd as I wasn't aware of any form of compensation to the PM for any maintenance related activities, just 8% of gross rent and 1-month of rent to lease the property, per our contract.Naturally I wanted to understand the nature of this arrangement, specifically how much mark-up is being charged, so I referenced a specific sewer repair bill from 2015 that was $2,600 and asked him if he could provide the vendor invoice so I could understand how much the vendor charged and how much revenue the PM recognized.  

California does not recognize series LLCs.You also want to look at whether a pass-through entity helps your bottom line and your taxes.

@Tushar P.Every state is going to be different, as each state has a slightly different tax regime in place.Some states recognize IRC Sec 469. 

@Mark Forest if you knew your data, then you'd also know that Detroit is using the US Census Bureau over several of its antiquated & mistakenly applied practices that have not properly recognized Detroit's growth over the last 5-6 years.Not even going to bother copying an article link here for your benefit as your head is buried too deep in the sand for any logical info to reach you.I'm sure you're successful wherever you're investing.

@Vanessa Switzler recommend checking out Detroit market.The recent NFL Draft, US Census Bureau finally recognizing the city population is growing (has been for 4+ years) and the fact that Detroit beat out Miami for highest appreciation in 2023 is attracting a lot of over-due attention.Already $4.5B of recent investment commitments and counting!

Are you good at recognizing BS and calling people on it? 

The benefit being, both Fannie and Freddie recognize the program, and you will be able to price the loan as if it was a primary residence, not a second home or investment property.

We have a crystal clear conversation about this at the lease signing.To show I am not a grinch - part of my agreement with folks is that every 13th month I discount their rent by 10% to recognize their on-time payments.

Certainly paying them a wage or fee reduces your rental income... but then they have to recognize that income (perhaps at a lower tax rate?).

If you consistently analyze properties, recognizing a good deal will be much easier when it shows up.