If the purchase is done in cash, as you mentioned, they’d have more flexibility, but they’ll still want to carefully consider the tax and legal implications of the subsequent sales.I hope this helps, and good luck with your client’s deal!

Lower property taxes, affordable housing compared to LA (CA buyers are usually cash buyers because what they net from their smaller home in CA can get them a bigger home here, often covered by what they net from their CA sale), allergies (smog), and politics. 

Also 4th quarter of last year Packwood and county officially did discuss potentially regulating STR's by either limiting numbers or adding a tax to cover increases in local services that are needed. 

An annual business tax as a hotel of $50 and collection and remittance of transient occupancy tax of 12% from renters is required of all short-term vacation rental operators.

Credit is a factor as bad credit may limit options, or may have the lender require you to put 10 or 20 years of taxes and insurance into escrow. 

I was just reading Mark's book "The Tax & Legal Playbook" this morning and it specifically had a "critical warning" (page 31&32 in Chapter 3).

The property was rented and generated $160 cash flow after mortgage, taxes, insurance and property management fees were paid.

Britt,My firm has evaluated some smaller properties (under $500k) in the past for cost segregation, and it generally does not cost justify moving forward, since the benefits are small, and typically the tax liability on the income is minimal if any.

Hello,              I was able to finally evict my tenant.

How does this look from a tax perspective.