I wouldn't recommend setting up an LLC out of state if you are buying in Tennessee unless your tax advisor is looking to help you on strategy.. but from a numbers standpoint, it really doesn't make sense when you start adding up on all of the annual LLC reporting fees from different states and then it starts cutting into your cashflow.

From my experience working with over 400 investors, consider alternative strategies like rent-by-the-room, buying an SFH with an ADU, or renting where you live while investing elsewhere.

I am not sure I agree with that strategy.

My idea to achieve this is to convert the studio into a short-term rental.I’m trying to determine if I’m forcing this deal to work by relying on the short-term rental strategy or if it’s a reasonable approach given the numbers.

With this strategy, we knew exactly how each house was operating and we could intervene or change leadership of the house if necessary to assure operations were going as we expected. 

This is what makes the hard money to DSCR combo a great one-two punch for the BRRRR Strategy. 

Quote from @Stuart Udis: @Danielle B What data are you relying on that suggests Section 8 leased properties provide for better returns than other investment strategies?

It was strategy, patience, and knowing how to find and execute the right deals.

For those who’ve used it, what strategies or sources have worked best for you when covering the difference between your loan and the total project cost?

The two are almost entirely different markets in terms of price points, returns, tenant quality, and overall investing strategy.