In my experience, the 50% rule would include vacancy, management fees, capital allocation, etc.

The way to handle it is to allocate expenses based on the percentage of the home’s square footage used for rental purposes.Here’s how it works:Calculate Rental Percentage: Add up the square footage of both the in-law suite and the rented room, then divide by the total square footage of the house.Apply This Percentage: Use this rental percentage to deduct a proportionate share of expenses like repairs, utilities, and mortgage interest.This post does not create a CPA-Client relationship.

Quite a steal and they get snatched up pretty quickly but if you crunch the numbers, even with the high interest rate you get pretty close to cutting even on your rent (after you allocate X amount to unforeseen property costs)

@Richard Chang,  Your basis (read that gain) goes forward as an allocation into each of those properties.  

@Evan Polaski yes the cash that I’ve allocated is going into low volatility liquid securities that also generate some yield.  

Typically a cost seg can provide a ton of benefits to accelerate depreciation on pieces of the purchase that wouldn't usually be allocated out under normal circumstances. 

So do we want to allocate time and money to making sure people who are lazy, stupid, or both are comfortable?

His plumbing allocation is $44,000...my other bids are between $25,000-$30,000 all for the same work.

I probably have about $200k to allocate to additional deals if I have no other income coming in, which gives me runway for another 2-4 deals at 25% down + rehab costs.

Make sensible financial decisions by allocating funds for unforeseen fees, insurance, property taxes, upkeep, and mortgage payments.