So here is a very short, quick outline of the legal process in the U.S.A.Any capital raised for investment purposes, in which one or more parties is NOT active in the management of the investment entity, is a securities offering.All securities offering must be REGISTERED with the Securities and Exchange Commission, unless the offering is covered under an exemption from registration.There are three primary exemptions from SEC registration.The exemption for intra state offerings (the offer is made to investors residing in a single state), the exemption for investors with FEDERAL accreditation (Federal banks, investment banks of a certain size, Federal funds dealers, etc) and the private placement exemption.Since single state offerings are very limiting, and many states require state registration and compliance with inherent costs, the private placement exemption remains the most popular.There are two methods of “private placement”.

To reduce your risk of audit, you want to be sure the company you select uses the IRS' preferred method, engineering-based.

Mainly have scaled through BRRRR method and some flips to acquire multi family.  

Although there are surely methods of acquiring leads with $2000 a month that may be profitable, such as buying list, paying callers, or running online ads, I would recommend not to go down that path. 

I used binder method to raise rent and we came up with 800 a month and I gave her 90 days to decide weather she could find somewhere cheaper or if she would like to stay.

Once you’ve built systems that work, you’re also in a much better position to know exactly what you want from a property manager — especially if you eventually scale and want to step back. 

You set the payment method, not the tenant.3.

I live in Northern California and am looking to step into real estate investing by purchasing my first rental property.

Others stick with spreadsheets but update them monthly instead of waiting until tax season.The biggest mistake isn’t the method — it’s falling behind.

There is also another big exception that I don't think was mentioned in this thread (but it was in Michael's linked thread), you don't have to report payments that were made by credit card or certain other payment methods.