I have not heard about this, but it sounds to me like a very expensive way of going if your looking for tax advisory.

Profitability is shown by a positive cash flow.To help with your housing expenses if you want to live in one of the properties, consider the possible rental revenue from the other units.Remember, the specific criteria for a "good deal" can vary based on your investment goals, risk tolerance, and personal circumstances.

You want to work with a professional who will understand whether the rehab that you do would be required to be capitalized and depreciated over years or eligible to be expensed in the current year.Furthermore, you live in New Jersey which has one of the more complex tax laws in the country.

My question is based on the following:lets say you put down 20% on 300K property which is 60k (plus closing costs ) and you are breaking even with you mortgage + other expenses(taxes ,management fees,...) included.

so most people will have to be as leveraged as possible to scale (at the beginning). as in, keep your LTV high and focus on buying 'as much' ($$) RE as possible. this is if you're doing a pretty run of the mill REI strategy like buy and hold. i came across an interesting guideline once: if you could sell today and net 7x+ your annual true net cashflow, you should cash-out/refi, or sell/1031. think of it this way: if your portfolio in a year is worth 1m market value, and you owe 600k, and have a lender that will do a portfolio loan at 80% ltv, you could cashout refi and get 200k to play with (minus closing costs). when you compare the now-lower cashflow from the existing portfolio (higher LTV & maybe different rate), to what you can do with 200k cash, THAT'S where it gets fun. maybe you lose 1k/mo in cashflow on the original portfolio (literally just made up a number, idk), but you can gain 2500/mo in cashflow with that 200k.. then doing the cashout/refi earned you a net increase in your monthly profit of 1500/mo, plus you're getting debt paydown and appreciation on "more" real estate, probably getting bigger tax benefits, etc.

Having a license is cheap, being able to use your license in any meaningful way is expensive.

Ask for a clear breakdown of costs and details about the extra expenses.

Very inexperienced sponsors who are great at YouTube, TikTok and Instagram - but most of those people if asked to run a sensitivity analysis on the impact of interest rates, increased vacancy or increased expenses would look at you like you had six heads and would not even know where to start.

But I feel like subdividing in this way would be too expensive.

Cosmetic rehab have lower risks and can still yield good returns.