It certainly has a discretionary aspect to it, but, if you include the area as more of a vestibule/coat closet area and make a clear distinction on the plans for the area you will be OK.

Make sure to make a distinction.  

But make sure you understand the distinction that @Dave Foster points out when he says "Because it is a converted investment they will have to prorate the gain between the period they lived in it and the period it was a rental.

In reality there are always differences and distinctions that can make the price considerably different, even within neighborhoods. 

We've gotta be able to make that distinction. 

An LLC is generally supposed to create a distinction and a barrier between your business ventures and your personal assets.

My fear is that when I get the distinction of living through my first IRS shakedown I'll be creating more problems for myself than I'm solving by keeping my accounting simple and minimal. 

So long as the numbers work as is, they should work better after the owner weekend-warriors their way through the cosmetic improvements and raises rents as a result.The key distinction I want to make though is that the improvements should be purely cosmetic and the other units should be rentable as is.   

Hi @Connor Pine, it's almost never truly too late, and when you're specifically looking at house-hacking almost any market has distinct advantages associated with house hacking.Given the current ABSURD(ly low) FHA interest rates for qualified buyers, I'd guess that making the numbers work for a house hack in Fort Lauderdale would be a fairly straightforward play.

But I also don’t have to smell that very distinct “dog pee/cat pee/cigarette/other gross stuff” smell when walking homes.