Use umbrella insurance as an additional safeguard, especially if you opt not to form an LLC.Avoid S-Corp taxation for rentals, as rental income is passive and not subject to self-employment tax. S

It is your first year when you get the major tax savings windfall due to cost segregation and bonus depreciation.

For example, instead of tax returns and W2s they will check bank statements and the After Repair Value (ARV) to underwrite the loan.

Their ability to recover their money should you default is much lower in this position.

Then rent the bigger home out using a property manager, allowing her to possibly cash flow and maintain that asset and let it continue to grow in value.Encourage her to consult with a CPA or tax attorney to explore the best strategy tailored to her situation.

Negotiating a lower price to account for these issues could be an option, but if they’re not flexible, it may be best to explore other opportunities.Happy to connect if you’d like to discuss further!

Many months of costly vacancy, local market rent & resale deteriation, special assessments, property taxes and maintanance fees suggest a quick sale would have been the wise thing to do 2 years ago.

Contrary to most business lending, the REI industry has a lot of "non-bank" lenders that provide attractive loans that can lower your cost of capital and improve your profit/cash flow. 

@Nicole GrazianoI recommend that you have a consultation with a real estate tax accountant regarding your taxes.Bigger Pockets is a great place to find a real estate tax accountant. 

The sellers you are dealing with in these situations don't deal with prorating Taxes, or any other kind of prorations, that is what an escrow agent does.