I just feel like these cost are significant when using leverage, any hiccups in terms of vacancy or unexpected repair will wipe out an entire year worth of cashflow.

If you have trouble finding a renter, or have unexpected expenses, you may have to subsidize out of pocket.Other questions:How long will you hold your rental?

Hi Anish,I always like to tell investors that its hard enough rehabbing when your within a 5min drive from the property lollolThere are always unexpected issues that arise and than need immediate attention.

The IRR might still look impressive if the investment is highly levered, but there might be little – if any – margin for error for an unexpected major capital item.

Beyond that, unexpected things can happen and they are not the fault of either party.

In my experience, you would be well served with a good contract attorney for the LLC op agreement, but words cant prevent relationship issues, disagrements, un expected negative results...2) if yoiu can live within just your own means I believe you will be happier longer term. 

It's important to have enough reserves to cover not just the negative cash flow, but also unexpected expenses that might arise.While rents may increase over time, it's not always guaranteed.

Response to Jonathan R McLaughlin Sorry for the delay, it's so many media outlets, that it takes me a while to get around to each of them.

If youre willing to squeeze into a 2 bed condo about $3k a month would be a great deal This is sad to hear but not unexpected, and I've seen it before.

This isn't unexpected -- we are 11 years into a bull market that historically only lasts about 6 years.