If development is allowed in the flood fringe then it has to meet certain criteria like it must be a certain elevation above the BFE, at least 1 foot, maybe more depending on the location, and it must be built with certain materials among other things.

I provide tenants with a form to request any improvements and it spells out exactly what they are doing, what material will be used, who will do the work, who pays for it, what happens to it when they leave, etc.

Just like you would do with any non-family contractor working for you:- get them to complete Form W9 for you, as you will need their SSNs- have them provide receipts for materials/supplies and keep those receipts- have a written labor agreement (how much and for what) - pay for materials separately from labor- make all payments electronically rather than cash so you can trace them- pay out of your business account, not personal- issue them 1099s next year if you paid them $600 or more for labor (for the whole year, not per job): https://www.biggerpockets.com/forums/51/topics/1167632-expla... 

He was a good guy, totally honest, and I bought a few good buys at tax sales after going through his material.  

A lot of work was delayed due to tenants moving out right before the holidays/new year and unavailability of some materials. 

When looking at out of state STR Loopholes the IRS is more likely to question how you are materially participating and managing the property.

It's up to you but flipping is obviously more risky... also depends how handy and knowledgeable you are, if you aren't able to do things yourself you need to budget for labor costs... on top of holding costs and material costs.

I couldn’t imagine telling my attorney that my property manager doesn’t feel comfortable sharing notices and material communication to me.

Considering the cost of materials is decreasing.

Talk to a lender or read some online material to learn how to do it quickly and wisely.