I recently converted a detached garage to a separate dwelling (ADU) that had its own permit and CO, and took action going in to make sure that it got considered both separately and in addition to the main house on the same lot.

My clients bought one that was four bedrooms with a den (just needs a closet) and a loft area (which could easily be converted). 

⏰This might be the most dangerous advice in estate planning.Here's what most practitioners miss: 📚While everyone focuses on the 10-year NFTL expiration, the IRS has a nuclear option hiding in plain sight.Under IRC §7401, the IRS can file suit in federal district court before the Collection Statute expires and convert your "temporary" tax problem into a renewable judgment lien lasting 20+ years.The timing game becomes Russian Roulette with a countdown timer.

.• Non-passive losses can offset both non-passive and passive income.W-2 income is non-passive, and in most cases, capital gains from selling investments (brokerage accounts, crypto, etc.) are also non-passive.Real estate losses, by default, are considered passive.There are two main ways to convert those real estate losses into non-passive losses (which is what you’d need to offset W-2 income):1.

-List strategically — Airbnb + Furnished Finder + Direct Inquiry Channels.Once you’ve got that, you can turn an average long-term rental into a steady $800–$1,500/month cash flow boost.Anyone here converted a regular rental into an MTR?

My goal is to build long-term wealth and eventually reach around $9,000/month in profit through real estate.Originally, I was really interested in multifamily investing and house hacking as a starting strategy, but with a family of four, I’m realizing that house hacking might not be the most practical option for us right now.

Here’s the listing:--> https://www.zillow.com/homedetails/398-402-Boston-Post-Rd-Wa... price: $350,000My plan:Live in the smaller homeRent the larger home immediately (after light cosmetic work)Use FHA (3.5% down) + CHFA (down payment assistance)Reduce my personal housing cost as much as possibleSlowly fix my unit over timeBuild equity and eventually refinance to help fund a future businessNUMBERSPurchase Price Target:Offer target: $260,000Expected seller counter: $275,000–$300,000Currently listed at: $350,000FINANCING (FHA + CHFA)FHA 3.5% downDown payment covered by CHFA assistance programEstimated interest rate: ~6.5–7%MONTHLY PAYMENT ESTIMATES (P&I + Taxes + Insurance)At $275,000 purchase:Mortgage (P&I): ~$1,775Taxes: ~$420Insurance: ~$150--> Estimated Total: ~$2,350/monthAt $300,000 purchase:Mortgage (P&I): ~$1,940Taxes: ~$420Insurance: ~$150--> Estimated Total: ~$2,510/monthRENTAL INCOME ESTIMATE (Big House)Based on local comps:Low: $1,700/monthTypical: $1,800–$1,950/monthStrong (clean/paint/update): $2,000–$2,100/monthMY OUT-OF-POCKET HOUSING COST AFTER RENTIf I rent the big house at $1,900/month:At $275k: ~$450/monthAt $300k: ~$610/monthIf I rent at $2,000/month:At $275k: ~$350/monthAt $300k: ~$510/month(I currently pay $0 in rent living with family, so my goal is to keep my costs low while building equity.)REHAB ESTIMATESBig House (rent-ready):Cleaning + paint + small fixes: $1,000–$3,500Optional cosmetic upgrades: $2,000–$5,000Small House (my unit):Cosmetic repairs only: $500–$3,000Optional improvements (done slowly): $2,000–$7,000Major systems (worst-case ranges):Roof: $8k–$12kBoiler: $4k–$8kElectrical panel: $1,500–$4,000Plumbing repairs: $500–$2,000 typical(Inspection will tell me more.)CASH NEEDED TO CLOSEWith CHFA:Down payment: $0 out of pocketClosing costs: varies, but often reducedExpected out-of-pocket: $1,400–$1,800Inspection: $400–$600Appraisal: $500–$700MY FINANCIAL POSITION(To give you context for risk tolerance)Income: $5,000–$6,000/monthMonthly bills: ~$2,600Emergency fund: $10,000Credit: 717Access to 0% APR business credit card (likely $8k–$12k limit)Currently pay $0 rent (living with family)MY QUESTIONS FOR THE COMMUNITY1.)

First is one year then automatically converts to month to month unless tenant specifically asks to renew for a year.

If the place is a converted single family or a section 8 lease then you would eat that cost.

Even though everything’s new and should be low-maintenance for a while, someone will eventually clog a drain, break something, or have an A/C issue.