The home office deduction cannot increase your passive losses:You can only deduct home office expenses up to your net rental incomeIf your rentals are already showing a loss, the home office deduction won't helpExcess deductions carry forward to future yearsMust apply §280A limitations first, then passive loss rulesExample: 🔢Rental Income: $24,000Regular Rental Expenses: -$20,000Net Before Home Office: $4,000Home Office Expenses: $3,000 [using allocations, not the Simplified Method]Result: Can deduct full home officeCounter Example: 🔢Rental Income: $24,000Regular Rental Expenses: -$26,000Net Before Home Office: -$2,000 (Loss)Home Office Expenses: $3,000Result: No home office deduction this year (carries forward)Reality Check: 🤔Let's be honest - while technically you need to:Calculate net rental incomeApply §280A limitations [Consult your CPA on this!]

An LLC isn't necessary when starting, in the long term, it may be worth exploring.

If he's a good guy, he'll tell you if it's worth considering or not!

Get at least three bids so you can compare pricing and professionalism.Estimating Rehab Costs:Walk the Property with a Local Pro A realtor, home inspector, or experienced investor can give you a ballpark estimate.Use Online Cost Estimators Websites like Homewyse can give you an idea of labor and material costs in that specific area.Break Everything Down Create a detailed scope of work so you get accurate bids (and avoid “surprise” costs later).Pad Your Budget Always add an extra 10-20% for unexpected expenses because there will be unexpected expenses.Consider a Project Manager If you won’t be visiting the property often, having someone local to check in on contractors and keep things moving can be a lifesaver.Since you’re in Illinois and flipping in Indiana, make sure you’re keeping a close eye on progress, whether through scheduled site visits or a trusted local contact.

Be sure to check out the free tools BP provides to help analyze deals you may have and also market insights.

Nobody wants to pay higher taxes or medical costs but sometimes its worth picking the less costly of the two and calling it a win. 

and it's not only not cash, it's expensive money - for it to be worth using you'd need either (1) something short term, like a flip (not recommending that here) or (2) a very high return that beats the interest rate you're paying on it.

New tenant application - check all background, credit, criminal, eviction, etc.

Might be worth getting their take on turnaround times and potential hidden costs.

Check your lease as it may state it there.