Hi Malcolm, With your strategy of holding multi-family properties or flipping, the key is running the numbers carefully to match your goals.

That experience made me realize I want to dive deeper into this space.Right now, I’m in the research phase—figuring out locations, property types, and strategies while working on funding and budgeting.

They must satisfy "material participation" test for their STRs to utilize the strategy.

How good of a deal would be needed to make this strategy work? 

This is dependent on your personal situation and strategy.

When we moved, we turned it into a rental, hoping this would be the start of our real estate journey—something we’d like to continue once my husband retires.Some key details:My husband is active duty and will retire in 3 years.We have one final move coming up this summer to Raleigh, NC.Our current debts are crippling us—the high interest makes it tough to stay afloat every month.The plan me and my husband are thinking bout:Sell the rental property.Use the proceeds to pay off all our debts, set aside emergency funds and a down payment for our next home.Free up $1,500/month from debt payments, and that also can stash in a high-yield savings account.Regain full VA loan entitlement, allowing us to purchase a multifamily home and use the house hacking strategy for up coming move.Avoid capital gains tax, since April marks five years of ownership, and the tenant’s lease ends in May.This wasn’t our original plan, and we hate the idea of using our equity to pay off debt.

For many it could be a decent strategy to invest their money back into their property.Its the same thing for doing a renovation.

If I believe I can generate enough profit this year and navigate any potential inspections next year, I’d be comfortable moving forward—using the income earned to cover any necessary upgrades.An alternative exit strategy is to document the financial performance and sell the property as-is, highlighting its strong short-term rental income.Think through your next five moves, from best to worst-case scenarios, and make a decision that aligns with your goals. 

What investing strategy are you most interested in? 

Consider consulting a real estate attorney or CPA to determine the best strategy based on tax efficiency, future sale plans, and estate considerations.