January 2020, 3 tenants residing in the same unit were arrested for (I don’t want my post to get flagged or taken down) but there were hard drugs found in the unit.

If the activities rise to the level of a trade or business and you/the entity are/is a dealer with respect to the mentioned properties, the income would not be capital gains but instead ordinary trade or business income subject to SE taxes.I'd recommend you engage a professional to help make the decision (especially if you expect first year net to be $300k), as there are qualitative and quantitative factors that need to be considered. 

@Maria Crenshaw background checks don’t really tell you much about who people are they only tell you who they were at one point in life, I speak from experience because I was once a lost cause dropped out of school, hardcore drug user the whole nine yards, I will have 4 years clean this year and own 2 business I am forced to rent because of my background, I’m forced to work for myself because of my background just consider the fact that things aren’t like they were 30 years ago when you could do things on a handshake Ive lived at the same place for 3 years now I pay 1100 a month in rent never been late one time or not been able to pay my bills. 2.

They smoke, drink and probably did drugs at one time in their life. 

Basically what im asking is will STBH(short term buy and hold) or value add investing be considered a dealer and if so, are there ways I can avoid this?

Drinking, drugs, fireworks and firecrackers, cars galore!

Like a drug addict, Baltimore must first hit rock bottom before there is any hope of change.

They likely have hard drugs like meth on the property as well. 

I am in a C class area and people can be surprisingly dumb about replying to a marketplace ad with the account that's full of their gangster/crime/drug/employment/drama issues.  

I buy/sell my vehicles on Craigslist, and don't use a dealer.