Obtaining "Real Estate Professional Status" as Consultant?

[Wade Chilcoat]

Hi everyone,

My wife and I currently live in South Korea and plan on moving back to the USA in early 2019. Right now we own 9 turnkey SFH's and plan on having 24 by the end of the year, maxing out our 20 Fannie Mae allotment in the process. Because our W2 jobs, rental income, and stock sales may put us above the $150k threshold for real estate deductions for married-filing-jointly, I am looking into getting "real estate professional status" designation by the IRS in order to write off of those interest payments and depreciation. However, because I do not manage my properties myself, I can't in all honesty claim that I actively work >750 hours per year on my rentals to satisfy the IRS requirement.

I am finishing an MBA in finance right now and when I return to the US I was wondering if I could get a job with a commercial real estate company or private RE equity company being hired as a consultant through my c-corp. This would satisfy the IRS rule of having a 5% or greater ownership in the company which actively conducts real estate activities through which one can claim RE professional status. The upside for the potential employer would be that they would save a ton in to having to pay me any benefits, and I could earn a steady income while still claiming RE professional status.

Does this sound feasible? As I see it my only other options would be to buy some local rentals and do the property management work myself to get the 750+ hours per year or get a RE license and be a RE agent. However, I would prefer to put my newly minted MBA to better use and have steady outside employment.

Any insights or suggestions would be greatly appreciated!

Thanks,

Wade