Or if you are using the home as a short-term rental, you could try to qualify as "materially participating" and use the short-term rental loophole. 

Buy and hold in one of the A class areas in Baltimore, if you are going to do Baltimore, it’s the only part of the city that has growing population, and rehabs are extremely tough right now especially with no experience, I’m doing one right now on the eastern shore, basically cosmetic, was built in 1994, systems, plumbing etc in good shape, labor is even less than Baltimore, gc-ing myself, still running me 70k, materials are insane right 3bd 1ba, mid tier Lowe’s stuff (I’m even putting in a shower insert, no title) is running over 30k.

We met all non-passive requirements and can provide proof to show that our projected annual materially-active involvement is at least 500 for 2023.We met with our CPA and he brought to our attention that we had a loss of -$107k.

An entire workshop of tools as well as building materials.

Ask them when they issue distributions (anything before the 15th of the month is a red flag), do they require reserves, how is maintenance charged, do you see copies of outside contractor bills, do they upcharge materials (PM's have LAR accounts with Lowes and often get 20% off), do they keep all late fees or just the management fee, what other fees do they charge (renewals, inspections, etc), where are tenant security deposits held, how are evictions handled and are you consulted before filing, what screenings do they run, what qualifications do they require from tenants, ask for a couple other owners to visit with for a reference. 

Something like 150,000 people moved here.I think a lot of the growth announcements for the area really haven't materialized yet as well.   

Looking for a way to get property for business that can essentially operate from a 2 car garage.So options are anywhere from FHA-SBA-USDA-A piece of grass and a metal building-seller financing-CDFI'sI like the look of USDA loans but, anyone experience with them?

AND materially participating in your rental activities (spending 500 hours or more on your rentals OR 100 hours and more then anyone else OR doing all the work) 

Originally posted by Account Closed:FYI, changing from passive to active actviity, you won't be able to take those passive carryforward losses, until you go back to passive or sell all activities related to the losses.Thanks, Tim.I read in another BP discussion that even if you go back to passive, the grouping of all rental properties still remain.What's considered "material change"  to ungroup?

Their material is just recycled, not made up.