first home (noob) as investment property

[Sam Kang]

My first post! thank you BP. I was planning on buying a house next year with my savings until I found BP and other RE channels. Performing Asset vs Liability.

1. I am 35 from nyc have about 200k in cash savings, making about 130k yr.

2. I was planning on buying a house in nyc suburb 600k~800k with 200k down.

(monthly payment will be 3000~4000)

3. Mother in law rents for 1200 3bed in chicago suburbs where house can be bought for 100~ 180k. and i travel there with wife and kids 3 4 times a year. ( I treat her like my mom and she also treats me like a son so No worries on the financial/problems)

finally my question:

instead of buying my personal home as my first property in nyc. I am leaning towards buying a home under my name with about 50k down in Chicago and have my mother in law as tenant where she will pay for the total payment of the house( insurance hoa fees etc total).

mortgage 600-800 hoa 200 tax insur200

total 1000 -1200.

Do you think this is a good idea?

Any legal obstacles?

how to properly set this up? (as i wont be living in this property.?)

tax advices?

any help or advices would be greatly appreciated!!!!!

[Daniel Kim]

Normally I would say always buy your own primary residence first and near where you live so you can experience the whole process (buyer's agent, inspections, appraisal, escrow, seller's agent, insurance, etc.) but easier said then done it pricey coastal markets.

I know you said there will no problems with your mother-in-law but I have learned to never mix family (or friends, co-workers, etc.) with money.

I think you would want to research the property taxes of the suburb you are looking to buy in. Illinois is notorious for high property taxes. You'll probably need to file a nonresident tax return in Illinois but that should not be that big of a deal.