The barrier is the additional complexity - now you are operating two sets of books, and filing two tax returns, and have more operating agreements, more state registrations, etc, need to manage cash better, need to keep in constant mind that your rents need to be a supportable FMV, which may require getting third party certification on your rents so that in the event of an IRS audit, what you have done is supported.In short...the size of the project, and the taxable income, need to be of enough scope to make all the additional costs and annoyances worth it. 

They can’t lend you more because if they have to foreclose it will cost them at least 10%.)Then you want to take that $300k and get a loan for another $300k with that $300k to buy your dream home.

@Rania MutumheHouse hacking means turning a place into a rental space, which calls for fix-ups, planning costs, and expert help.

So how much did this cost me to get involved besides an awful lot of time?

It depends on how much the NY house will sell for vs how much the TN house will cost.

This is because keeping a property nice has associated costs.  

I am looking for an investor to partially fund some of the soft costs for a large townhouse project I'm working on. 

I’ve been eyeing a few off-market deals that would allow me to pull out a good amount of equity after rehab, but then the monthly mortgage payment is the same as market rent.

My partner will be general contracting at no cost, although he will be paying a few key 1099’s and contractors .

If you’re not going to make the smart move of selling tax free, and make the questionable move of being a landlord in Ca just because you already own the home…A) No LLC, it won’t help with taxes, liability, or anonymity but it will increase the cost of insurance, taxes, and any financing  (and maybe the bank calls the current mortgage  due.)B) Get an umbrella policy if you are worth more than $1M, maybe $500k  C) Don’t even THiNK about doing this yourself.