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I have seen many HMLs grow their business this way and it's how I am growing mine.The reason paid ads don't work for most people is because they don't have a system in place to manage the leads and they don't follow up enough.The leads are different than organic or referrals, but they are viable deals.

I am looking to grow my Commercial office and STR management portfolio in 2025. 

Hi BiggerPockets Community! 👋
My name is Anthony, and I’m an investor based in East Hartford, Connecticut. I currently own a 3-unit multifamily property, and I’m actively looking to expand my portfolio while building...

Quote from @Conrado Balicusto: Quote from @Chris Seveney: @Ryan DaultonWe use it for private lending - because the tax benefits are lost with real estate When lending usually it’s taxed at ordinary income rates if using your own cash so using a sdira I prefer for lending and my w2 income savings for real estate to maximize tax efficiency  Thank you for the insight on private lending and tax efficiency.

I've also held of holding properties in individual LLCs that are owned by one S corporation, which allows for a 60 / 40 split between ordinary income (regular tax) and dividends (capital gains tax rate).With the goal of minimizing taxation and liability protection, what would be the recommendation from more experienced people here?

Congratulations, you get to share your partners tax burden and pay the depreciation recapture at ordinary income rates. 

@Tom Rairdon If you’ve owned your short-term rental (STR) for over a year, it likely qualifies for long-term capital gains (LTCG) treatment, taxed at lower rates (0%-20%) compared to your 33% ordinary income bracket.

Hey BP!
I’ve been diving into the idea of investing in midterm rentals in Portsmouth, VA, and surrounding areas like New Port at Victory, Cavalier Manor, and Waterview. I love the flexibility they offer for traveling...

In your case, changing the property from a rental to your primary residence constitutes a change in use.The depreciation recapture will be calculated based on the fair market value of the building at the time of conversion, not including the land value.Since you're tearing down the existing structure, the entire amount of depreciation taken over the past two years will likely be recaptured, as the building's value at conversion will effectively be zero.The recaptured amount will be taxed as ordinary income, up to a maximum rate of 25% for residential rental property (Section 1250 property).