You've already put in some great thought, and with that ADU, you've got a lot of options.One thing to consider is starting with long-term tenants in the ADU for a bit and then transitioning it to a mid-term rental (MTR) down the line when you feel more comfortable.

This enables you to get your feet wet while seeing how the experience goes and once you get that settled in and you're comfortable with your processes then I'd start branching out into other investments whether it be local to you or out of state. 

Purchase price: $40,000 Cash invested: $16,000 Conveniently out of the flood plains, this welcoming 3-bedroom home is features a huge master bedroom, refinished hardwood floors, spacious living and dining rooms, and a stunning kitchen!

I always go in with a simple offer of this is the rent, and we are also comfortable giving you a (insert something you need to do anyways like a basic, white paint job or a new appliance).This is one of the most uncomfortable parts of the business though, and the quicker you get over being able to have these conversations, the quicker you will be successful in this business.

I agree, with Joe, it does come down to you and how comfortable you are with house hacking and if it makes sense for you financially and for your family.

I feel like the more people share, first hand experience in this space gives folks confidence and one of many reasons it doesn't feel comfortable to me.

Make sure you’re comfortable with that risk.If your primary goal is tax benefits, transferring the property may not be necessary.

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Once you know your goal number then you can start using all cash flow from the properties and your own income to start paying them down to what you feel comfortable with! 

You also want to consider the capital you're comfortable investing.