Just be sure to talk with your relatives and do your homework on specific locations.

Given your relative inexperience it's key to have a team you trust execute the rehab in a complete and timely manner.Give yourself margin for error as well.

You would be better off asking this question on the Tax forum where several tax accountants, including myself, answer tax questions: https://www.biggerpockets.com/forums/51-tax-legal-issues-con...Short answer is that you (your LLC, to be more specific) will need to issue your relatives form 1099-MISC, and they - rather than you - will owe taxes on their portion of the profit.

Reposting my answer that I gave you on another forum:Short answer is that you (your LLC, to be more specific) will need to issue your relatives form 1099-MISC, and they - rather than you - will owe taxes on their portion of the profit.

We ASSUME that the owner of WD Invest might be your relative.

Factor in vacancy risk, and ongoing management oversight.Becoming the beneficiary of an irrevocable trust could give you long-term control while honoring your relative’s wishes and minimizing upfront cash outlay.

You'd be surprised how many of your relatives, friends, co-workers, neighbors, etc. are currently investing or looking to do so in the near future.All the best!

dont have good enough credit.. took guru class's on how to buy with the wrap method.. your relative would be absolutely nuts to sell without getting released from the liability of the current loan.. especially in Texas where they can get deficiency judgements even on owner occ loans.

Start with Turnkey or Passive OptionsFor a first investment, it’s often easier to go:Turnkey single-family or duplexPartner in a syndicationMid-term rental with solid managementKeeps things simple while learning the U.S. landscape.If your relatives are looking at Florida, I’m based in St.

If you do decide to move forward with your relative, consider forming an LLC, with all your roles spelled out in detail in your partner agreement.