Here’s why and what alternatives might exist:Real Estate Syndication or Fund: Invest in funds that generate passive rental income, which can offset Schedule E losses.Real Estate Professional (REPS): Qualify for REPS to reclassify rental losses as non-passive, allowing them to offset active income.This post does not create a CPA-Client relationship.

Some of my clients love the cash flow in the east side neighborhoods over by Slavic Village and Broadway selling between 90-110k with rents up to $1,800+, but just really depends on the types of neighborhoods you're investing in and your risk / reward threshold. 

The idea would be, say we wanted to buy a company for $100k and they have 100 clients.

Well for starters it's very difficult to get seller financing.

What I wrote above does not create an attorney/client relationship between us.

who are their other clients?

Who would ever invest.. now that they have not paid as agreed of course they are going to find it difficult or impossible to raise new money in the fund you invested in..

My friend said his client nearly bailed when she found unexpected wiring issues behind the kitchen walls..apparantly the seller hadn’t touched that electrical since the Reagan era..but with a patient electrician who understood the local code and a carpenter who improvised a shelving trick in the diningrom, they ended up selling above asking.Flipping and building can get tricky, especially once you start thinking bigger.

It's also important to be aware of any deed restrictions or covenants that could impact your intended use of the property.A Personal Anecdote:I once assisted a client in Omaha who purchased a Freddie Mac home intending to convert it into a rental property.

Continuous participation.This is great if you are talking about an SMB with effectively connected Real Estate.Note rental activity is considered passive unless you meet the RE Pro threshold of 750 hours and more than 1/2 your time.This is the conundrum for passive real estate investors.If you have a full-time job or a large, time-consuming business it can be difficult or impossible to qualify.A huge loss from depreciation if you have one LP investment isn’t going to do anything for you.