My understanding is you have no greater protection and unless you have actual employees there is no benefit to it.

Concerning the 2% rule, what determines the 2% is your gross rents divided by the purchase price of the house.  

update on deal: the rent rolls for the property were extremely low ( 6 unit complex gross revenues of 4200) it would have been negative cashflow property and there were long term contracts ( any where from 6 to 10 years ) in place that we had to honor upon purchase.

Your maximum estimated gross income is in the neighborhood of $281,600.00You know the market you are in I will assume.

Robert Ombres The going rate, for Property Management Companies is 6-10% of the Gross Monthly Income.

There are also property management companies out there who likely offer these same services, but they'll likely take 20%+ of your gross rents.If you're footing all of the capital for a deal, I don't think I would bring in an investor on the equity front.

@Andy Gross That is a very good question.

How could I analyze the amount I can afford to spend on an upgrade based on projected gross rent receipts?

But you'd also be paying relatively less for your home than if you were to buy a SFR for yourself with no income to offset your expenses.If, or should I say when, you rent out your unit also, you'd be grossing $2,200/month, and there'd be what to talk about (is $1,200 a month enough to cover all those items listed above aside from debt service?).  

I have no magic answer. for me personally I have been active real estate agent/broker since I was 18 i have made millions and LOST millions ( 2008 melt down like many others in that time frame) this go around for me it's TRUE equity not size gross size of the portfolio for me personally. and again, for most of us that are actively engaged in real estate be it lending providing capital to flippers making real estate commissions ..