You can qualify for this by:Having tenants for 7 days or less at a time.Materially participate, typically with the test: You participated in the activity for more than 100 hours during the tax year, and you participated at least as much as any other individual (including individuals who didn’t own any interest in the activity) for the year.If you materially participate, you can offset your non-passive income even if you have W-2 income.

For example, things like tools or building materials that I buy specifically for repairs on these units.

Paint correction and detailing take hours of labor, materials, and a dust free environment.

The key is to have a detailed scope of work itemizing the materials and grade of materials to ensure that the contractor will complete the job for the original agreed amount. 

The only upgrade I made to the condo while there was a fresh paint job that was done by my generous brother-in-law FOR FREE (minus materials) and the epoxy I handled myself in the garage.

We have several options to minimize squatters and breakins to steal mechanicals:1) Remove Mechanicals (so can't be stolen), install ArmorGuard doorjamb reinforcement to make it harder to kick in doors and use double-key deadbolts so entry thru a window still doesn't allow opening of a door for greater access.2) Install DAWGS which are metal screens that replace doors and cover windows to deter entry.

Tax benefits can help make a better business deal, but a bad business deal is hardly ever going to break even just because of tax benefits.The other big consideration you should have, in order to actually benefit from real estate fueled losses or credits, it will require a substantial investment of time - either to get over the material participation thresholds for short term rentals, or to get over the real estate professional thresholds for mid term /  traditional rentals. 

Seller's in most state are required to disclose material issues they know about.

They just paid for the materials and trucking, and rented a dozer that my brother operated to grade the soil.

Land in michigan is less than in texas , north texas.I will give you examples on cost differences.Material prices are the exact same price if not a little less.texas framing price per sqft $2.00plumbing $9500hvac $9500concrete Labor only $2.00 per sqft  Concrete $180yd 5 sackdrywall $10500Electric $8000Ok here are the michigan prices , better sit down.framing $13.00 sqftplumbing $25,000hvac  $20,000concrete is about the same for materialdrywall $20000electric $25000Both quotes were for a 3/2/2 home with 6/12 roof hipPeople in michigan wonder why houses are so expensive , its because of the sub contractors.The plumber only has about $5000 worth of material to do a whole house but yet there still asking for $25000