I built out a home recording setup earlier this year (thread is probably easy to find still) it may have some good reading and rec's to think about in there.
Monitors, I went with Yamaha HS5s and they sound great. For their price range they compare favorably to some slightly more spendy units.
Supergobi has provided some really solid advice.
I don't have any regrets on my choices so far. The one thing I have added recently was a decent room mic to supplement the close mics and overheads.
I have gotten a number of compliments on how things sound through my setup.
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