However, it may be a smaller space with less luxuries (you could always take lower income and rent or airbnb out the ADU and live inside the main house).3.

General considerations include:Income Taxes- Report rental income, distinguishing between short-term and long-term rentals.- Utilize depreciation deductions to reduce taxable income.- Understand passive activity loss rules limiting deduction of losses from passive activities.Capital Gains Taxes- Be aware of tax implications when selling property, considering short-term and long-term rates.- Explore strategies like 1031 exchanges to defer capital gains taxes.Deductions and Expenses- Know eligible deductions: mortgage interest, property taxes, insurance, maintenance, and management fees.- Maintain detailed records of all real estate-related expenses.- Use cost segregation studies to expedite depreciation of your properties to offset large income gains.Entity Structure- Choose appropriate legal structure (LLC, partnership, or S corporation) with consideration for different tax implications.Tax Credits- Explore available credits, like energy-efficient or historic rehabilitation credits.Qualified Business Income (QBI) Deduction- Check eligibility for QBI deduction, providing up to a 20% deduction on qualified business income.Record Keeping- Keep accurate and organized records for tax compliance and audits.State and Local Taxes- Consider varying state and local tax implications, including property and income tax rates.Tax Planning- Engage in proactive tax planning, consulting with professionals for a comprehensive strategy.Tax Changes- Stay informed about changes in federal, state, and local tax laws affecting real estate investments.Remember to consult a real estate tax professional for personalized advice based on your specific situation.

One issue is the challenge of qualifying, as conventional loans will have DTI requirements, income requirements, loan size limits, and loan amount limits that investors looking to scale a portfolio run into as soon as the financial freedom snowball starts rolling.

So it’s all tax free income.

Also, assume a regular job so I do not need extra income.

I am particularly interested in neighborhoods with strong potential for growth, rental income, and community revitalization.I am open to various possibilities and eager to hear your perspective on these and other up-and-coming areas.

For much less I can turn the dining room into a bedroom for higher monthly income. 

If cash flow is your top priority, Cleveland's reliable rents and predictable income could be a strong contender.

@Megan Tavasto I’ve started using Housie.io, seems to be more comprehensive with background checks and income verification directly from bank, not pdf which can be forged

That's a good question. it is technically income to the investor.