Not to mention you need to have some liquidity left over after the deal closes in order to qualify for a loan. 

As Michael mentioned you just need to respond to the IRS and state this is what you're doing.

Many benefits to doing so. 2) If you are going to invest outside your area, the one thing I rarely see mentioned here is simply the "investment landscape".

I’ve heard David Green mention it in a podcast recently.  

Not to mention, they probably won't want to admit it if a building they manage is in really bad condition.If you're serious about buying you should first talk to fellow investors and define your buy box.

Book recommendation #1: Hands Off Investor by @Brian Burke https://store.biggerpockets.com/products/the-hands-off-inves...Book recommendation #2: Lend to Live https://store.biggerpockets.com/products/lend-to-livePodcast Recommendation: PassivePockets podcast is focused on passive investing in syndications - https://passivepockets.com/podcast/Passive investing summit: PassivePockets Summit May 2-3rd in Columbus https://get.biggerpockets.com/passivepocketsevent/I make these recommendations specifically since you mentioned passive real estate investing, and syndications or hard money lending are really the two most passive ways to invest in real estate. 

They allow you to include up to 6 months of rent payments in the loan if you are unable to occupy the premises during the renovation.Just to be complete, it's also worth mentioning that both the VA and USDA have renovation loans.

I talked to my lender contact and, as Kerry mentioned above, it's pretty uncommon that a traditional lender would offer a HELOC product on an investment property (non-primary home). 

Now, if you listen carefully you will find that he too found some of the same things that others mentioned...no deals in Austin, prices were too high...but then he adjusted his approach and nailed it!

Not to mention the tax benefits it allows.