There are many scenarios where we strictly entitle lots and sell them off to a different Builder.

I did the same thing and made a lot of money strictly by smart leverage.

St Paul is the most strict, followed by Minneapolis. 

Start-up costs are also deductible but are amortized over 15 years with a limit of 5k.Start-up costs have strict rules and your case might not be the same as this one.Case Summary:Timeline line of eventsStarted investigating property: FebPut first contract (canceled): MayBought first property: December 30thWhether a taxpayer is engaged in a trade or business is determined using a facts and circumstances test under which courts have focused on the following three factors that indicate the existence of a trade or business:Whether the taxpayer undertook the activity intending to earn a profit;Whether the taxpayer is regularly and actively involved in the activity; andWhether the taxpayer's activity has actually commenced.On the basis investor testimony, we may assume that he undertook this activity to make a profit and that he regularly and actively engaged in it.

On top of the line of credit, we have also equipped them with unsecured revolving lines of credit totaling $377K in which they use strictly for renovation.

If they pass a strict grandfather rule where any sale loses their right to STR, the buyer may still face problems (which is also a part of their due diligence, but I would be honest upfront).

Regulations:Given that New Orleans has strict rules for short-term rentals, make sure to fully understand the local zoning laws, STR permits, and licensing requirements for B&Bs.

If you can't get the residents out that are not paying, then nothing will help.I would hire an attorney that deals strictly with evictions and start issuing eviction notices to anyone who has broken the laws of their lease.

One that has strict STR permitting with exceptions for owner occupants would be a bonus.

Whether you're a new investor or looking to scale your portfolio, qualifying for traditional loans can be a challenge—especially if your personal income doesn’t meet the strict requirements.That’s where Debt Service Coverage Ratio (DSCR) loans come in as a game-changing solution for real estate investors, providing an easier way to finance properties based on the property's cash flow rather than your personal income.What is a DSCR Loan in Real Estate Investing?