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!

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@David YoungRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

I've been a financial planner for 17+ years and one of the main things I've learned is that the more I think I know what's going on, the less I'm actually correct. 

Or do they leverage debt, and use the subsidies to cover the equity needed?

Prioritize your financial stability.

With this in mind, if you intend to leverage short-term debt (hard money), it's even more vital that your underwriting is thorough and that you have the correct systems in place to tackle potential issues.

We raised $4.5 million in equity and got $4.5 million in fixed rate debt from Freddie Mac at a 5.85% rate.

Maybe she’s financially illiterate and won’t see what a scam your seller finance offer is, but she did have $100k laying around to buy the property, so probably not. 

If you’re just getting started, house hacking is one of the smartest moves you can make to accelerate your financial growth.### Final ThoughtsHouse hacking is a great strategy—but it’s not a shortcut to instant wealth.