It literally looks like the father in-law poured water all over the floor from a bucket.

Hey Kathy, You should be able to be in the 6s on a DSCR STR loan depending on your credit score and LTV bucket.

Also just because they have debt does not mean there is tax consequences.Also people need to make sure they do not group UBIT, UBTI and UDFI in the same buckets as I see these being used interchangeably.

Here’s the 30,000-ft view:What cost seg actually doesA study breaks the property into buckets — 5-, 7-, 15-year stuff (carpet, cabinets, certain exterior, land improvements) vs the 27.5-year building.

I like a fairly simple 3 bucket plan with TSM index funds, RE and a relatively small amount in bonds/T-bills/HYSA to protect against SORR...more reading ;) With $500k in stocks and $550k in primary residence you should be in good shape.

Two of them even have their own bucket trucks and chippers for tree work .

Use simple LLCs for rentals and keep them taxed on Schedule E.Big picture: plan flips and rentals as two different “tax buckets”.

Then still compare those rents to market, because inherited rents can be below or above market.Convert comps into a realistic rent numberTake your comps and group them into three bucketsInferior, similar, superiorAnchor your estimate to the “similar” bucket, then adjust up or down for key drivers like parking, in unit laundry, renovated kitchen, and separate utilities.Use a conservative number for your underwriting, then optionally a “market rent after light rehab” number as a second scenario.Underwrite expenses properly, this is where beginners missAt a minimum includeVacancy, 5 to 8 percent depending on the submarketRepairs and maintenance, often 8 to 12 percent of rent on small multisCapital reserves, another 5 to 10 percentProperty management, 8 to 10 percent even if self managing, so you can compare deals consistentlyTaxes, insuranceWater sewer trash if owner paidLawn and snow if owner paidLandlord paid utilities if anyUse two quick valuation checksRent based checkCap rate or NOI multiple is less reliable on small residential, but it still helps you avoid overpaying based on rent.Sales comp checkCompare to similar duplexes and small multis that sold recently, but the rent numbers are what will decide if the deal works for you.Run the deal through a one page summaryPurchase priceEstimated market rent per unit and totalTotal monthly expenses and NOILoan terms and monthly paymentCash flow after debtCash on cash returnDSCR if you are using DSCR financingI hope this helps.

I'm in the same bucket.

Great post, this is the difference between active real estate investors and those who just buy a rental for cashflow and many times they get thrown in the same bucket. its like someone who golfs every weekend versus someone who lives and breaths it and knows the miniscule differences that others do not know.