Most CFO clients that I work with that are new construction/home builders usually target a 20%-25% gross margin as they usually have to deliver high teen returns to their investors.Great question. 

It's crucial to consult with professionals experienced in 1031 exchanges and partnership dissolutions to ensure compliance and optimize tax deferral.Given the complexities, seeking personalized advice from a tax advisor or attorney is highly recommended.

Is there a limit to how high I can go? 

that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

@Cathy Ries Yes, tax planning before acquiring rental properties is highly beneficial, especially given your situation.

It could be 50% high, 50% low or right on the money but no matter which of those three it is makes no difference.

Your credit score is high enough to get something done, but whether or not that delinquency will fly is going to depend on the lender/underwriter.

Hey Rebecca, I'm a broker and investor up in Sacramento and manage about 100 investment properties (STR and LTR).Many of my clients are high W2 earners seeking "bonus depreciation" to offset tax liability by investing in STR.

My mortgage should be about $2,100 after I get PMI eliminated and I was going to rent it to a friend that I have known since high school for $2,000 a month.

But the level of negative cash flow that you're talking about is quite high and it sounds like it's not something you're comfortable with and thus should look for something else.