I gravitate towards "red states" given the landlord-friendly laws and relative ease of evictions, which unfortunately are unavoidable in the buy and hold game.

After 20+ years in real estate partnerships, here's what actually puts you on the IRS radar (and what doesn't):REAL Red Flags That Matter:The Partner Complaint TriggerDisgruntled partner files Form 8082K-1 disputesPartnership disputes leading to tax filingsReal Impact: Instant IRS attentionSuspicious Loss ClaimsLosses exceeding investmentArtificial basis inflationSudden large losses without economic realityExample: $100K investment claiming $500K lossesRelated Party GamesCircular property flipsBelow-market transfersFamily partnership schemes without substanceWatch Out: IRC §267 and §707(b) violationsDebt Engineering Red FlagsBasis inflation schemesArtificial guarantee arrangementsPartner debt shifts near year-endCritical: IRC §752 compliance matters!

if there's no major rehab, it usually means you can't buy it at a deep enough discount for a BRRRR to work. 

If you’re able to dive deep or work with someone who has boots-on-the-ground experience, the returns can be very rewarding.Good luck with your journey, and feel free to reach out if you’d like more insights or resources on Detroit!

While Treasuries are often viewed as "risk-free" investments, certain real estate deals in today’s market offer a compelling alternative—especially when purchased at a deep discount.Take, for example, a 1,000+ unit apartment complex in a suburb near Michigan.

3) I am aware that the rent must be market rent, I do wonder if using the 1031 transfer to buy my in-laws property and then immediately renting it back to them would raise any red flags.Thanks

Businesses are “living” organisms with a life of their own, usually having deep meaning to their owners.  

Also look back on their application and see if you missed any 'red flags" so this can be a valuable learning experience for you.

Quote from @Drago Stanimirovic: Raghavendra,This is a major red flag.

I am not going to deep dive here.I usually lose these sorts of deals to people willing to underwrite more aggressively.