That all makes sense, and it sounds like you’re approaching it the right way, especially stress-testing occupancy and being conservative on insurance and cap ex.One thing I’d focus on as you narrow in on the second home loan is that you’re making two decisions at once: 1. what’s cleanest for the deal 2. what’s most resilient for the balance sheet long-termSecond-home financing is often the least friction up front, but it can quietly lock in some constraints around future leverage, basis, and exit flexibility, especially given the insurance volatility. 

Sure, you can be comfortable with the strategy itself and its implementation, but we stress the importance of creating a DEFENSIBLE strategy in the event of an IRS audit, allowing you to KEEP the deductions you received and ultimately providing you with confidence when your return is filed.Also, the more detailed your time log is, the easier it is for a tax advisor to review and point out what hours will stick when an IRS agent takes a look at your log.Things you can consider to add to strengthen your time log: Screenshots of time spent on calls with contractors/cleaners/etc.Pictures of work you are completing (i.e. painting)etcChris Tile, CPA

.• Start forming the “core four”For Phoenix rentals, this usually means:– An investor-friendly real estate agent– A solid property manager– A lender who works with investor products– A reliable inspector or contractorEven meeting one or two now will make things smoother when you’re ready to make your first offer.You’re doing the right thing by getting plugged into the community ahead of time — that’s often what separates smooth first deals from stressful ones.– Ridge Lending Group (Licensed in 49 states, excluding NY)

Make sure you have a healthy reserve account per property so surprises don’t turn into stress or forced decisions.3.

Actively participating may allow you to offset non-passive income, and you can also take depreciation, potentially accelerated through a cost segregation study, to optimize your returns and save so you can really scale.Building a local team that you trust can make scaling much easier and less stressful too.

And remember, screening is the most important part, taking the time to properly vet applicants can save you a lot of stress down the road.

Yes, the costs can be astronomical in dollars, time, invasion of your privacy via discovery, and emotional stress. 

For a NJ house hack, set a tight buy box near your train line or bus route, run actual rents from listings and PMs, and stress test with higher taxes, insurance, and utilities.

And if it doesn't, you need to either increase your income or decrease your spending. 

Keep DSCR healthy and stress test conservatively.4.