New to real estate investing - Ideas?

I just bought my first home in April with an 80/20 ARM. I intend to refi this coming April but would like to start looking around for an investment property, such as another townhouse to rent out. I'd prefer to find such a rental that already has tenants in it. Now, I don't have much cash to put into buying... show more I just bought my first home in April with an 80/20 ARM. I intend to refi this coming April but would like to start looking around for an investment property, such as another townhouse to rent out. I'd prefer to find such a rental that already has tenants in it. Now, I don't have much cash to put into buying the investment property, so it'll more than likely be another 80/20 ARM. I'm okay with that, even if the rent I charge doesn't cover the mortgage and taxes (I can float a few $100's each month to cover the gap). I'm looking for the tax break I'll get with it (even though I'm not too sure how much of a break a second property will really give me on my taxes). Another idea I've had with this is to open my own "business" so I can't be sued personally (God forbid someone wanted to do that). If I do that, can I get better tax breaks for having a business while I still work full-time?

The benefits I see from this are two-fold right now: 1) I gain the tax breaks at the end of each year, and 2) I build equity in both properties.

In theory (and with all my ignorance in real estate), this plan sounds great to me. For those of you out there who are masters of the real estate trade, please point out the errors of my thinking here. This way, I can make the necessary adjustments which will help me be SUCCESSFUL in this venture. I don't see a need to go out and re-invent the wheel by repeating some painfully obvious mistakes.

I thank you all for your time and expertise.



Thanks,
Greg.
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