All Forum Posts by: Phillip Ballard

@Joe M. that was my idea. However, if Brie and Lumi are right about finding a cheaper flat while also bringing in additional cash flow I would not mind that idea. Would get the benefit of living alone while also managing some property and tenants for added experience. 

@Brie Schmidt - I have just been casually browsing around on websites looking at SFH and some flats as I try to figure what is the best strategy for me. As mentioned, I think that I have found my strategy and just need to keep pressing forward. I know that I live in Lakeview now and will more than likely not be able to stay in the area. If I can find a cheaper 3 flat in a safe area that would be the ideal way to go, especially if it further north or around the Blue Line (work commute).

@Lumi Ispas you are spot on with what I am trying to do. I will be trying to put as little down as possible so I can just get started, preserve reserves, and keep on moving. Asking the seller to pay the closing cost is a great idea top help out in that area as well. Thanks for the recommendation!

Lumi,

Those are some great points, I do want the most out of the deductions. My only concern with the House Hacking route is it being my first property and also the upfront amount it will take to purchase a triplex in Chicago. Chicago isn't the most expensive place in the county, but it's not the cheapest (as you know). 

Thanks Russ! I see where you are coming from. I have lived with this individual for a year already and I know that he is financially stable so would not need to worry there. Also, have another friend that I would debate using that is a consultant, would only be using the apartment for short periods of times. As for tenants walking all over me... not a worry. Haha. 

Phillip Ballard

Hello, 

I am a new member to BiggerPockets. However, I was drawn to this forum as I am currently reading "The Book on Rental Property Investing." My current situation is that I am renting an apartment with a friend/roommate in Downtown Chicago (Lakeview) and have been debating on jumping into real estate. Our current landlord has mentioned that our lease will be ending in 4 months and I see this as an opportunity to make my initial move into real estate. My thought is to acquire a property to eventually rent for a decent cash flow. My two strategies I am debating on (would love your input on) are buying a single-family home an having my current roommate pay rent or house hack with a triplex. 

In my mind it seems that an easier and much more smooth transition into real estate would be to purchase the single-family home and rent out the extra room to my current friend/roommate. Inevitably, he would be paying me enough rent to either be living for free or very close to free. All income from my 9-5 would then be open to saving. If and when we decide to move out I would be pulling rent from a family or 2 tenants for a positive cash flow. 

I do not fully understand ALL of the tax implications of having a live in tenant with the single-family home yet (separating area 50%/50%, reporting rent to be taxed, deductions, etc.). However, just overall seems like a scenario where not much change except the extra money in my pocket to be placed towards other assets. 

Wanted to see if any others have had this debate? What they decided on? Experiences? Thoughts? Strategies? Etc.?

Thanks,

Phillip Ballard