My CPA has essentially called it a "tax asset" - where you end up w/ tens or hundreds of thousands of dollars in losses that have been passed forward so that at some point you can offset passive gains. 

**Mesa's Eastmark area** - Strong school districts driving family demand Property Types in DemandThe most profitable flips currently involve:- 3-4 bedroom single-family homes built between 1970-1990- Properties with pool potential (but without existing pools)- Homes with generous lot sizes that allow for expanding square footage Renovation Trends That SellPhoenix buyers in 2025 are particularly drawn to:- **Energy efficiency upgrades** - With Arizona's extreme temperatures, smart thermostats, improved insulation, and energy-efficient windows offer significant appeal- **Outdoor living spaces** - Covered patios, pergolas, and native landscaping that requires minimal water- **Modern desert aesthetic** - Clean lines, earth tones, and natural materials that connect to the Sonoran landscape- **Flexible spaces** - Home offices or multi-purpose rooms that accommodate remote work Challenges to Navigate Water ConcernsThe ongoing drought situation means water-conscious renovations are no longer just trendy—they're essential.

A smart lock and smart thermostat are also essential for managing remotely.

We've essentially ruled out investing in our local community because we can't seem to find a good deal (we live about 1.5 hours north of NYC, so purchase prices are very high), so we are considering (1) investing out of state; or (2) investing in some northern NY localities (Syracuse, Albany, Rochester, etc.). 

Essentially you're making a much higher income in one city in the US but you're using your capital to invest in a much lower priced city so you get the best of both worlds.

Research the Market:It's essential to comprehend the local real estate market before you start flipping residences.

I'd essentially have 2 units out of the garage.

Basic, but functional faucet.Appliances ($3,500):Focus on essential replacements.Refrigerator: Energy-efficient model.Range: Standard electric or gas range.Dishwasher: Basic model.Consider deals, scratch-and-dent appliances.Lighting ($1,000):Recessed lighting in the ceiling.Under-cabinet lighting.Basic pendant lights over the island.Paint & Trim ($500):DIY painting.New baseboard.2.

Essentially looking at the bottom line and then you can add back a few of those things like depreciation. 

Essentially it comes down to how much time and effort you're willing to spend building the model.