All Forum Posts by: Justin Nichols

It is generally not recommended to put a house hack situation into an LLC. The issue is that none of the expenses for the portion you live in are deductible on Schedule E. (Property taxes and mortgage interest excepted, but deductible on Schedule A). So essentially you can only put half of the property into the LLC, which might work for tax purposes (sort of), but doesn't work for liability at all since you can't usually put half of a duplex into an LLC as a separate asset.

I do recommend that you keep a separate checking account just for housing expenses because it will really help you come tax time.  For things that apply to both units, just remember that only half of it is deductible.  For things that are bought just for your unit, remember they aren't deductible at all.  Keep track of what's what and you'll be fine.

Justin,

If you can afford the prices in CA. then I guess it's just a matter of where you're going to buy, I live in CA. and I do own 2 properties here but I do most of my investing out of state..again it comes down to spending all your cash in CA., for the price of a CA. home you can buy multiple properties in another state, however, with that said the CA. home, because of the prices will be worth more and bring you higher rents...

James

Justin

Is this a property you live in or already rent out.  If you currently live in it and it is in an area that is appreciating,  you can make sure that it is rent ready: that the rent will support your costs: and bet a good local property manager.  Since you may want to stay there while you visit, are you thinking of it as an Air B&B, that has a different criteria.

I am a buy and hold person.  We have SF, MF and small apartments and almost all of them are out of state.  It is definitely doable but a great Property Manager is really important.