Also, the tax benefits of the buy and holds help offset the increased tax consequences of fix and flips.

Taxable income is not cash flow.There are a myriad possibilities for taxes.

There are income tax implications of both..

I target pre-existing, non-conforming lots that town assessors have deemed unbuildable either through a land use code or a very low tax assessment.  

Here are a few things that I like about the neighborhoods in Indy compared to other states: high rent-to-home-value ratio, consistent and gradual city development, relatively low property tax and insurance cost, affordable renovation service cost.From my experience, it's possible to find deals that meet 1% rule if you invest in *turn-key* duplex or SFH here, but they are harder to find, and could potentially slow down you from scaling up.

So you have LP who makes investment then when it does not go right has no clue what to do @Chris Seveney then points out not only did they get wiped out but if there is significant cost seg taken there will be some pretty hefty tax due and the LP did not know if there was a cost seg or not..

Many banks handling tax escrow accounts for mortgages have mistakenly thought there was one tax due twice/year or totally missed one of the taxes.Investors should research the SEV and the Non-Homestead property tax millage rates to project what the property taxes will be after adjustment.

So, instead of paying taxes on $50K, I'm paying taxes on only $21K. 

For instance, property tax & insurance expenses.

. $500,000 was tax free due to being married.