When the income is derived simply from buying and selling, especially if there is value added through the process, then that typically will be viewed as conducting a trade or business, and if done on a regular or repeated basis, would have UBIT exposure.So it is not the notes, but the buy, remedy, resell model that create the exposure.

He was stating that the interpretation of that is where the presenter was possibly deriving an incorrect interpretation.

It's one loan, with the purchase price funded/distributed at closing, and reno loan paid out in draws as work progresses.

Income Tax Return for an S Corporation, state "Distributions and other payments by an S corporation to a corporate officer must be treated as wages to the extent the amounts are reasonable compensation for services rendered to the corporation."

Either way, the closing agent would distribute the profit to the wholesaler at closing.

Instead of taking a distribution, you can take a loan from the 401(k) instead.

The net profits (hopefully, losses if not) from the property get distributed to the equity investors.

And bring your business cards to distribute to the newbies who will be gathered there, if you are so inclined.

I also agree that our current system is flawed in the 'wealth distribution' any way you cut it.Okay, librarian coming out,  @Brandon mentioned Naked Economics by Charles Wheelan@Becky Davis mentioned End of Normal by James Gailbraith,  and Seven Sins of Wall Street by Bob IvrySorry, I saw a reference question and couldn't help answering it.

While the deal with debt stacked into the structure will distribute less in true dollars, the percentage or return can be greater.