First Investment Idea - Tell me all the holes

[Jose Saladin]

I want to purchase my sisters house as my first investment. It would be a live in rental.

I would have one bedroom to myself with access to the common areas. I would rent the house to her. She gets the master bedroom and my nephew gets the third room. She would have access to all the common areas as well.

The house is valued at $320k 'ish. I can get her to sell to me for the current mortgage balance of$150k'ish. I can leverage my WLI cash value to purchase it outside the banking system.  

The goal is to purchase it in a land trust or llc. Use it to gain some experience as a landlord and in two years leverage the equity to purchase a duplex. And of course, take advantage of the tax benefits along side my current business income.

Viability of the idea?

Pros and cons?

[Basit Siddiqi]

It sounds like a single family house where you will be living in the house(personal use).

Therefore, you may not be getting the tax benefits you think you are.

Consult an accountant.

I am not sure why your sister would agree to this as well, she is losing $170,000 in this transaction and she faces the possibility of you increasing her rent.

You also have to charge market rent or close to market rent or it is all deemed personal use.