I'm in the process of researching the Lafayette, Indiana market for potential rental property investments.

Even longer answer: talk to an experienced accountant about potentially treating your lending as a business and structuring it along the lines of what you suggested.

Hello Everyone - Thank you for taking the time in advance to assist me with your input and perspective on a potential buy.

Generally, higher cash flow means more potential work and more monitoring of the property, two things you'll do much better if you invest near you. 

appreciate all the advice and I'll be following up with some of you to pick your brains as we get more involved in the due diligence and underwriting of potential deals.One thing I should have mentioned is we have a couple of relationships with a few private investors (family, friends, etc.) who have expressed interest in providing the capital if we find a deal that pencils.Thanks for all the feedback so far everyone.

I listend to BP podcast every night.. you guys are great, thank you.If you're evaluating a potential deal, I'd be happy to analyze it using my model.

I'm not cancelling out any other responses here with the one I am presenting, i am just adding a potential.

I got into this niche due to the low entry cost and the potential for great returns in a short period of time.

. :)Potential Markets:Gulf Shores, ALCorolla, NCRockaway Beach, ORMyrtle Beach, SCCharleston, SCPort Aransas, TXOcean Shores, WA** I assume the California coastline is not cost-effective, I never see it on a list of recommended vacation rental.** We love and have connections to Hilton Head Island, SC but know it is hostile to STRs.** Slight bias against Florida due to anticipated stress and anxiety of watching a hurricane hit your vacation home annually, ha.

@Brian Hunsaker sure a paid off property netting you ~$10k annually, or ~$15k before depreciation, sounds fine.The potentially "silly" way to reduce your taxes is to leverage out your properties.