My wife and I are looking to invest in our first short term rental and I would like to set up an LLC for legal protection. 

It's in a challenging area where Section 8 is virtually my only tenant base—not a slum by any means, and the house itself is in great condition.Here are the options I'm considering:A) Keep and Re-rent to Section 8: By investing in some upgrades (paint, cabinetry, toilets), I can increase the rent to $2k (from $1800), projecting a cash flow of approximately $1300/month.B) 1031 Exchange into a Short-Term Rental (STR) in Shenandoah: This would involve using a portion of the proceeds to make the property Airbnb-ready.

I get anywhere between 4 to 12 leads every day!

MLS, Zillow, Cold Calling/lead generating, Realtors, Mail Marketing, SEO/Online marketing...If you are going direct-to-owner (aka sourcing your own deals), you'll have the most and best options. 

I would say Short term rentals (air bnb), Mid term rentals (renting to nurses), Fix and flip, mini storage, commercial buildings.

Those cities are leading the charge, by showing significant growth in the market.

If your friend doesnt have a rental license and everything that goes along with that (lead cert/etc) they are not legally allowed to collect rent and if they go to a judge they will most likely make have to repay any rent collected. 

Hey @Gerald Joyce - I am a sucker for utilizing as much space in my own Chicago buildings as I can....even if the numbers don't pencil out perfectly on the cash flow because like your Ravenwood building my buildings are in Bucktown and I know the long-term appreciation will far out way the short term cash flow...The question is, with your current situation can you bridge that short coming?

.- I have a mixed use property with 2 commercial spaces rented for the last 2.5 years and 1 short term rental/residential space I have airbnb'd/lived in part time for the past 2.5 years- I owe about $110,000 and have about $200,000 in equity- My credit is 580 - 620 right now due to being laid off last year and missing a couple of credit card payments.

Note: I was looking into the Short-Term Rental Loophole (e.g., rent it out for on average less than 7 days per a stay) and could definitely demonstrate material participation (e.g., designing/developing ADU, furnishing it etc.)