The IRS treats your LLC and you as the same taxpayer, so it’s ignored for tax purposes.If you want to keep it under the LLC, you’d be looking at a DSCR or commercial loan, which usually comes with higher rates but no personal name transfer needed.Either way, the key is to document your intent clearly and keep your accounting clean so the IRS and lender see a consistent story.Best of luck with your project, and happy to connect!

The Golden Rule Applies: The best way to handle this is to treat them exactly how you would want to be treated if you were in their shoes.

Steve, with tenants who’ve been in a place for 40 years, you’re really dealing with a different category of renter — these folks have basically treated the place as their home longer than many owners stay put.

Hey @Laura Heald, I’ve got a buddy who actually built financial freedom doing co-living, but it only worked because he treated it like a real strategy, not some magic cash-flow hack.He’s got 7 places in Florida — all tweaked to fit 6–8 rooms — furnished everything, used PadSplit’s structure for rules/tenant issues, and had someone local handle the hands-on stuff.

It also matters if it's a Deed of Trust or if it's a Mortgage or if it's a Sheriff's sale.Frankly, an HOA Sheriff's sale is treated much differently than a Tax Sheriff's sale.And, In fact, one strategy is to purchase a discounted 2nd from a lender, who believes the 1st will be foreclosed and the 2nd will be wiped out anyway.

That means you’re not blocked from using her REP qualification just because you personally don’t meet the test.Where it gets tricky: Even with her REP status, the IRS still requires that you materially participate in these specific rentals before the losses can be treated as non-passive.

I think so.We leave a treat from a German bakery and a handwritten card for our guests.  

. • If the average stay is fewer than 7 days, and you materially participate in the activity, the STR can be treated as non-passive even if you are not a Real Estate Professional. • This is often called the “short-term rental loophole.”Based on what you shared, the short-term rental route may be the relevant path here.There are very specific requirements to document material participation, average stay duration, guest interaction levels, etc., so the details matter. 

Treat it like your “digital business card,” not your deal marketplace.

What to look for in a good rent-by-the-room propertyThis matters a lot:• At least 3–4 legal bedrooms• Two or more bathrooms• A layout where bedrooms don’t share thin walls• Plenty of parking• A common area large enough for multiple people• A location near hospitals, colleges, or job centers• A basement or attic that can be finished legallyAnd most important:A floor plan where rooms feel private.Privacy is what keeps tenants staying longer.My honest adviceAt your age, with energy and time on your side, this strategy can fast-track you if you treat it like a business.But don’t do it blindly.Tour existing co-living houses in your area.Study your local ordinance.Model the extra expenses and the extra time.Room-by-room renting works, but it works because the operator is organized, not because the property magically prints money.