For instance, a one unit house only has one renter, so there is only one income line and the ordinary expenses are not a long list of items.

Single Family Houses have the benefit of being able to sell them to ordinary homebuyers.

I know that there are people here who have said this isn't legal, but no one has ever been able to provide any evidence that a deed restriction such as this is in violation of any law.Deed restrictions are perfectly legal, and restricting resales through a deed restriction is nothing out of the ordinary, and not just with REO sales (I have a friend who inherited a house when he was younger, and the house came with a deed restriction restricting his ability to sell the house until he was a certain age).I don't know any way around the restriction, and while I don't know for certain what the penalty might be, I would assume they could come after any profits at the very least.

Since you said it was for a flip, I'm assuming the color is not too far out of the ordinary.

Your flipping income should be ordinary income subject to SE tax.

This was no ordinary flip!

Each unit had 4 BR and 1 BR. It

Granted, it gets more complicated when you're talking about getting taxed at ordinary income rates, etc. but to oversimplify a cash-flow positive property gives you 1.) reserves for the unexpected and 2.) potential seed money for your next acquisition.

To the wholesaler that receives the fee it is current earned or ordinary income.

Issues to consider are whether it's just you or there are partners, if you plan on having different LLCs for different holds, if you want to incorporate strategies to shift from ordinary to capital gains when selling the holds, and much more.