I often will try break it down fro my clients by looking at their current investing portfolio, their current personal exposure and finally their future goals.

At what point would you start pocketing excess rental income?

Chicago is plagued by excess R3 zoning, which allows only for single families. 

The first pillar is a good insurance policy as that cover the majority of your exposure.

I’d like to know your thoughts/recommendations on the financial and tax aspects of this situation.Goal: Help my son, Steven, who's 23, purchase and move into my mother’s house (in East Windsor), which is currently owned by her estateConsiderations: Financial House being purchasedPurchase price is $170KThorough market analysis came in at $180KZillow estimate $233KChris / DorisIncome ~ $200KCredit Score – 820Liquid funds - $14,000Inheritance - ~$14,000 (available upon closing estate, probably a couple of months after sale)Additional funding could be procured if requiredPrimary residence valued at $400K with $250K mortgage StevenIncome - $0Credit Score – 755Liquid funds - $20,000Minimal prior incomes – summer workCurrently in Peru until March Steven's LLCBoth Steven and his cousin are ‘members’Newly formed farm$75,000 loan obtainedFirst payments due in 2019~$20,000 startup cost (bulk of equipment is available to him at no cost)Experienced, long-time farmer providing guidance Post-Sale Steven would live in house Two or three acres would be farmed After a year, the house would either be sold (if the farm didn’t work out), or purchased by Steven Desired Minimize mortgage / taxes for first year Minimize down payment, ideally less than $14K Avoid liability exposure on property if any farm workers sued Any suggestions or thoughts would be greatly appreciated.Thanks.Chris

They will bring far more exposure to the listing and more exposure means a better offer.

As you know, these are akin to hotels/lodging and you have significant cycle risk/exposure with short-term rentals (i.e. they are one of the first asset classes to suffer when there is a downturn, they are among the classes that go down the hardest, and they are among the ones that take the longest to come back afterwards).

Current lien holder has 1 year to file for excess funds, so at least she'll still get something. 2nd option would be to purchase the distressed note outright from the current lien holder & then deal with the tax lien, eviction & rehab.3rd option - I could purchase the lien with a combination of some cash & a smaller note (either with smaller first lien this property or 2nd on another that I own), & pursue the foreclosure etc. 

By having them in a separate IRA, they are less open to liability exposure stemming from the IRA's real estate investment.Bottom line is that you may have multiple IRA accounts and move funds between them relatively freely.

The first pillar is a good insurance policy as that cover the majority of your exposure.