They make money on every step of the process, and there's a lot of incentive for them to exaggerate what your returns will be.

In neighborhoods on the West like Old Brooklyn, Clark Fulton, and West Boulevard, I have seen properties yielding 10% and higher cash-on-cash returns.

While $300K may not yield high returns in your market AND presumably limit you to smaller deals with less doors/units, the same amount could align you with a group of investors purchasing dozens of units elsewhere.

LLCs require additional filing fees and tax returns and just complicate things.

A buddy of mine, who’s been an agent in the Phoenix market for nearly as long as I have, once had a client who stumbled into a 1031 that shot their returns through the roof because they snagged a property near one of those new tech corridors sprouting up.. from what I’ve heard, that corridor’s been buzzing with interest lately.What’s exciting right now is seeing how investors are leveraging 1031 exchanges to pivot into markets that are on fire.

however, I noticed that I had still incurred a $150 late fee from the attorney along the way. 

House-hacking by room is a topic that pops up when we're late in the real estate cycle; in tier 1 areas multifamilies available are scarce or priced unreasonably so one is 'forced' to rent rooms instead of multifamilies.Things to consider:1) Exit strategy - are you forced to live on site and manage it? 

I'd recommend the spread on the return and your ability to replace damaged items (local vs. not local, strength of your team) be the determining factors in that decision.

This will also make your cash-on-cash return go down.

Something I've been concentrating on internally very much lately.