*This post does not create an attorney-client or CPA-client relationship. 

It's not just about creating beautiful spaces; it's about making every square foot work hard for both the investor and the end-user.Optimizing Space UtilizationThink about how reconfiguring a floor plan can add value.

If you are prepared for the costs involved and the modifications needed to the property to make the basement unit conform, the pay off of creating an extra rent producing unit is huge. 

If a cost segregation study was performed, the accelerated depreciation may further reduce the property’s basis, potentially increasing taxable capital gains when sold.Depreciation recapture will occur when you sell the personal residence, so it’s essential to keep detailed records of all depreciation claimed while the property was used as a rental to ensure accurate tax reporting at that time.This post does not create a CPA-Client relationship.

However, you can reduce tax liability by:Converting the flip into a rental for at least a year, allowing for depreciation and potential 1031 exchange benefits when selling.Offsetting gains with deductions, such as accelerating business expenses or using cost segregation for rentals.Using an S-Corp for future flips to lower self-employment taxes while keeping rentals in an LLC for liability protection.Deferring deductions to 2025 if your 2024 taxable income is high.While a 1031 exchange isn’t an option for flips, strategic tax planning can help minimize taxes.This post does not create a CPA-Client relationship.

Also, check state-specific tax laws, as some states impose additional transfer taxes.This post does not create a CPA-Client relationship.

I currently work with investors in a few markets in TX and outside of TX on creating a turn-key portfolio and helping them manage on the back end. 

(In other words, I won't be creating a profession out of REI.)

Even if you create a non-CA LLC, if you are managing the business from California, you will likely be deemed to be "doing business" in California and therefore likely subject to CA taxes.

Is anyone else going this route with their advertising to try to create a niche for their rentals?