As I understand it, buying a property with intent to flip it quickly, for a profit, makes one a 'dealer' in the eyes of the IRS.  

There's a good chance that applicants on McDaniel street are drug dealers or prostitutes, because that's the main drag, so, you might have to deal with letter from the police, telling you that they might seize your house, if you don't evict the tenant, if they've caught them in criminal activity. 

high crime drugs and predominatly rentals.. no hope of selling to owner occupied folks... as they don't want to live there either... in our area there are NO true D areas all neighborhoods are filled with owner occs unlike much of the middle part of the country or the big eastern rust belt cities.

Do I need to become a dealer at some point?

If you feel cars are important to you, and you have access to a dealer, buy a 3 year old car from a dealer auction, then after a year sell it on craigslist, and repeat the process.  

We are closing on a park where we have a Lonnie dealer who we finance homes to, he manages renting or rent credit.

But - if you have short term flips ( less than one year until sold), short term wholesale sales, etc - and if you do more than the IRS deems "part time" or "singular in nature" - the IRS can label you as a "Dealer" - if so...game over.

The neighboring house is a Columbian drug cartel safe house16.

Bottom line:  If you are looking at houses in a neighborhood and you think you would be more comfortable if you had a gun, don't buy there.The other MAJOR issue with bad neighborhoods is drugs.  

You have to become a dealer in your state and get pricing to reflect that.