Main ideas are: separate active income (flipping) from passive income (renting), separate asset holding (renting) from operations (property management).

Also, if they leave the place without damages, clean, and ready to rent (quick turnover), then I would consider returning the security deposit.

It is due to close tomorrow and a tenant eviction hearing is the following day and there is no security deposit in place for the problem unit.  

The LLC operating agreement would serve as the partnership agreement, plus the LLC will provide a layer of asset protection for both of you. 

@Peter Bui You may want to partner with your lender for an estimate of closing costs using the specifics of the property that you're interested in purchasing and the type of financing that you have secured, during that conversation you can ask how closing costs are calculated to see if the magic number of 3% makes sense in your situation

Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.

No offense to anyone, I just would rather learn from people who have experienced at least one full credit cycle in this business and know how to operate regardless of interest rates/market conditions.

I'm considering adding one to my property (I have a secure place to put one near the mailbox area).

My 9-5 is in construction as a Heavy Equipment Operator.

Purchase price $ 510,000 Purchase Closing Costs 10,200 Estimated Rehab Costs 5,000 Total Project Costs 525,200 Downpayment (36.9%) 188,000 Loan Amount 322,000 Loan Interest Rate 5.250% Total Cash Needed 203,200 Gross Rents 61,440 Monthly Rental Income 5,120 Expenses Advertising 25 Gardening 66 Insurance 250 Management Fee 512 Pest Control 50 Property Tax 638 CapExpense 512 Security System 280 Vacancy 512 Total Monthly Expenses (55.6%) 2,845 Monthly P&I 1,778 Total Cash Flow 497 Performance Metrics Monthly Cash Flow $497 Cash on Cash Return (ROI) 3.17% DSCR 1.28 Purchase Cap Rate 5.35% Proforma Cap Rate 5.20% 1% Rule 0.97%