First, there are about 6 states that I refuse to invest in because of their tax laws and what I consider to be an unfriendly business environment.

Credit is a factor as bad credit may limit options, or may have the lender require you to put 10 or 20 years of taxes and insurance into escrow. 

The property was rented and generated $160 cash flow after mortgage, taxes, insurance and property management fees were paid.

He was a good guy” and his information  on buying at tax or foreclosure sales was realistic and doable. 

This allows us to close extremely quickly, which is an important competitive advantage.I don’t know how to read our own tax returns, and I’m certainly not going to read yours.

Someone can be a brilliant tax person but horrible to work with, and also vice versa. 

For example, you could create a weighted structure where a percentage of profits is based on cash contributions, and another portion compensates for rehab or management efforts.Rent Payments and Tax-Free Profits:If you structure it as an owner-occupied property, the rent you pay could be shared proportionally, but tax-free gains on resale may only apply to your share, as you’d be the owner-occupant.

I assume they collect a proration every month for property tax?

In California there is $800 franchise tax per LLC per year, which discourages a lot of RE investors from getting an LLC.

Texas is definitely a strong market, but keep in mind that high property taxes can eat into your cash flow.