First Time Owner Occupant Transition to Eventual LLC Investor

[Suzanne Douglas]

I'm currently looking at a duplex in my neighborhood. Seeing as I'm a real estate newbie surrounded by non-real estate people, I need some help from my fellow BP audience.

Stats: One side of the duplex has a current lease in place until April 2020 with the tenant paying $1500/month in rent. The other side is not currently leased and would serve as my family's primary residence for the next 2 years while my sons finish high school. Total price of the property is still in negotiation as they've set it far above market value. My hope is to get them to agree to $350,000.

Background: I currently have a LLC that originally focused on being a media influencer through a blog regarding living your best life/financial freedom. The blog has not really produced income in the last year despite loads of work, a lot affiliation networks, and paid social media promotion. I'm still ok with the lack of blog income since the LLC provides for some tax breaks from the money I've spent to try to get it off the ground. However, I know the LLC needs to show good income in the next 2 years before it gets deemed a hobby by the IRS. My plan was to transition the LLC to real estate investing in the next 2 years. I'm prefer the rental side of real estate for the passive income it provides (hello BRRRR strategy!!!).

Problem: I'm unsure how to best proceed given my circumstances and 2 year timeline for occupancy vs. 2 year to show LLC income. Originally, I'd assumed I'd purchase under me, rehab if needed while living there and collecting rent. Then, 2 years down the road when the boys graduate, I could refinance to take advantage of any equity in the property so that I could purchase a second rental unit. I wondered if I should refinance under the LLC to show income (tax purposes) and do some asset protection. But I'm not sure how that would affect things. Could I continue to rent my side of the duplex if owned by the LLC? How does that work? What benefits would I gain or lose in doing so?

I just keep thinking there's got to be a smarter way to do this with as little of my own money out of pocket as possible. I'm all about creative financing, especially when I'm looking at college for 2 kids in 2 years! I just can't figure out how to best do this first deal that will set me on the best path for future ones. Any guidance and help would be greatly appreciated! TIA

~Suzanne