I'm getting ahead of myself and into complicated territory.Anywhoos...Start with total income.

The rental Arbitrage model is becoming very complicated in some areas  and it requires  furnishing places  which takes a lot of money.

So let’s find a deal first and then you can go to all complicated Transaction if needed.

In order to do this you need to file form 3115 with your next tax returns (which is a bit complicated), which allows you to change depreciation method.

Turnovers are expensive.So, if you look back after 10 years and you only had 2 turnovers vs 4 turnovers because you charged 5% under market rate rents you will be far better off financially, not to mention in terms of the qualitative aspects of owning a rental.I will spare you the really complicated explanation, but assume a turnover will cost you $7000 including vacancy costs.4 turnovers will cost you $28,000 over 10 years.2 turnovers will cost you $14,000 over 10 years—and your 5% rent reduction will cost you $12,000.$12,000 + $14,000 = $26,000 over 10 years.There are further auxiliary benefits as well.

This complicates it more. 

Ah heck, this is getting too complicated.

It complicates things.

@Nik DivakaruniYou are making the whole deal a lot more complicated just to provide the convenience of the buyer saving 5.5%.

This complicates the partnership as it dilutes the value I can bring by assuming the risk.In my experience so far there are HML's that also fund the rehab and some that do not, so how is it any different in underwriting's eyes if I just never take a draw with an outfit that includes the rehab funds?