For REP status federally, you must meet two requirements: work 750+ hours in real estate activities and spend more than 50% of your total working hours on these activities during the tax year.

Also, what if you spend thousands of dollars on a brand-new DADU, only to have the seller reaqcuire the house?

That said, the appreciation has been very high over the years. 

You would need to track everything you spend on the business unit and write those off and anything shared would be times 50%.

If you can get to 10 over a 20-year period, you will change your life and look like a genius.Increase earnings, reduce expenses, save, and invest.

It took three years and I lost over $200,000 on those deals alone!!

And I used all my rental mailbox money over the last 9 years since I first started investing to buy more and more.

Flipping a brand new home likely wouldn’t bring much profit - especially after having to close twice when you first buy it, and later sell it.Maybe you have millions to spend and I’m just missing the big picture… but when I think of “income” I’m usually thinking “net income” after you factor in expenses, like purchase price or building costs?  

Over the years the only place I have lost money is the stock market.

Very different advice if you were looking to make $20k a month while spending your days on the golf course or lake.