Remember that the IRS has strict rules regarding SDIRAs, and any violation of these rules could result in penalties and adverse tax consequences.

This means you are doing it strictly for the cash flow.If it were me, I would go the ADU route, Rents could be comparable to the condo without the HOA dues (yes higher Cap-Ex but those are long term expenses), and with everything on one property, things are just easier to manage (one mortgage, one property tax bill, one insurance, etc.). 

At the same time though, we'd like to compartmentalize the liabilities of these assets by putting them each into their own LLC.

Another thing to check when running your numbers is the POTENTIAL taxes on the property.

Today, let's discuss property tax assessments.

They carry forward but would be much stronger from a tax planning perspective if they were used to offset active income. 

Join us for a special Facebook Live session with Tax Pro Amanda Han!

In a bid to get people into these homes and paying property taxes, the state of Arizona rolled out a plan for active duty members that paid 22% down on any house in the state that had previously been lived in.

The same holds true for tax lien sales.

I do the math to figure out these ratios for each applicant which is harder than you think sometimes with people working multiple gig type jobs with inconsistent income because then you also need their tax return to calculate factor their expenses in.