@Craig Cann I had not dealt with soaked carpet pads or wood subfloor but in a generic basis ozone treatment worked for us however I have heard others use enzymatic cleaners such as Nature’s Miracle or Rocco & Roxie are the best in getting them out completely. 

Prohibited Transactions: The IRS considers certain transactions prohibited, either by the nature of the transaction itself or who the transaction is with (known as disqualified persons).

Tax treatment has such a significant impact. 

In short: $558k gross, ~9% cap, modeled cash-flow of ~$92k/yr with professional management (or ~$140k if self-managed), and conservative 5-yr after-tax proceeds of ~$1.4M.I’m sharing the math, assumptions, depreciation treatment, and the risks/opportunities I saw (value-add ideas, occupancy sensitivity, and market comps).

In short: $558k gross, ~9% cap, modeled cash-flow of ~$92k/yr with professional management (or ~$140k if self-managed), and conservative 5-yr after-tax proceeds of ~$1.4M.I’m sharing the math, assumptions, depreciation treatment, and the risks/opportunities I saw (value-add ideas, occupancy sensitivity, and market comps).

The main difference is liability protection, not tax treatment.

That means depreciation recapture applies on your share when you report the sale.This is one of those situations where it’s worth having a CPA or tax attorney review the deed to confirm how title was structured, because that detail drives the tax treatment.

Just looking for some feedback on the deal given the current nature of the market.

In short: $558k gross, ~9% cap, modeled cash-flow of ~$92k/yr with professional management (or ~$140k if self-managed), and conservative 5-yr after-tax proceeds of ~$1.4M.I’m sharing the math, assumptions, depreciation treatment, and the risks/opportunities I saw (value-add ideas, occupancy sensitivity, and market comps).

Just be aware of the filing requirements and possible taxes for each state, some states have franchise taxes or other fees for LLCs and S Corps.If you’re already paying 22% or more, an S Corp structure could potentially reduce self-employment taxes on any business income, but it might not change the tax treatment for the rental properties themselves.I’d recommend chatting with a CPA who specializes in real estate investing to fine-tune the details and make sure you’re not overcomplicating things.