It is the best way to get started with little money down, taking advantage of best market rates, and gaining experience landlord right in your backyard. 

This means a portion of the previously taken depreciation will be subject to taxation, effectively lowering your adjusted basis in the property and potentially increasing your taxable gain at the time of sale.

Hi @Nicole Boerema I think you'd be a good fit for my Co-Investing Club, which focuses on passive investing and syndication-style deals.

I’d also be thinking about your taxes from the start, understanding the difference between passive vs. non-passive income, and what works with your current income, and see what you can do to make the most of it.You can write off things like mortgage interest, property taxes, insurance, repairs, improvements, depreciation, and even take bonus depreciation on certain components with a cost segregation study.

That means more cash flow, faster pay-back, and smarter reinvestment.What Is Cost Segregation & Why STRs BenefitCost segregation is the process of breaking down a property’s purchase price (or renovation cost) and reallocating portions of it into shorter depreciation lives (typically 5, 7, 15 years) instead of being lumped into the standard residential/structure life (27.5 or 39 years).For STRs (especially where average guest stays are short and you materially participate) this becomes even more powerful:It accelerates write-offs and frees up cash sooner.It helps you convert your property into an “active business” rather than passive income in the eyes of the IRS, making more deductions usable against other income.Personally I'm a realtor which makes it easy to gain "material participation" as I am classified as a "real estate professional"There are ways to structure a property that is managed by someone else and still qualify.

@Trevor Brouelette yes househacking is worse cash flow but you put significantly less money down (3-5% vs 25%) and you save a ton of money while living there, plus you gain experience and credibility.

Hello Everyone!
I'm Gail.  I’m planning to purchase a 3-4 multifamily house in Minneapolis. Is Minneapolis or St. Paul a good market to invest in? Does anyone have experience investing in either of these cities? Thank...

Yes, you can cost-seg only the STR portion, but you’re not limited to only that.You’re allowed to run a cost segregation study on the entire property even if only part of it is used as a short-term rental.The key is allocation.A cost seg breaks out the components of the whole building.You then allocate depreciation between:The STR portion (non-passive if you materially participate)The LTR portion (passive unless you qualify as REPS)So you’re not restricted from studying the whole asset.You’re just restricted in what losses you can use depending on participation.2.

I invest $5K a month in passive investments through a co-investing club.

I am trying to start with wholesaling real estate and eventually get into something more passive.