Originally posted by @Brit Hale:The disconnect I'm seeing if that the folks arguing in favor of 13k+ remodels are talking about GC's, code, and living in NY & CA.

@Cole Britting thank you, I’m in the DC metro area but investing in Baltimore.

Let me try to hit some of them.Profits on flips are taxed as ordinary income. 

I'm not really looking for anything out of the ordinary, I've got a 790s credit score and will be able to put 25% down. 

Thank you SO much Brit for the ideas.

Seems like it would be ordinary income for your filings.Good luck on the partnership, Adam!

The expenses need to meet the definition of ordinary and reasonable though.There are different classifications real estate investors in the tax code as well and it can play a major part in what is deductible and when it is deductible.Education expenses for the purpose of learning a new profession would be difficult to qualify as legitimate business expenses.Hobby loss rules can apply to real estate businesses as well as any other business and need to be considered.The real estate professional status can be quite beneficial if an investor qualifies.

As such, the income you earn is considered ordinary and subject to self-employment tax.There are strategies involved that allow you to limit your exposure to self-employment taxes.Furthermore, you may be eligible to put a sizable portion of the income earned towards a retirement account allowing you to reduce taxable income. 

Nothing screams out of the ordinary here.

There are no tax breaks on top of that, and you can’t use that depreciation to offset any of your other income.Unfortunately, dividends are taxed as ordinary income, which can contribute to a bigger, rather than smaller, tax bill.Difference #7: ReturnsWhile returns for any real estate investment can vary wildly, the historical data over the last forty years reflects an average of 12.87 percent per year total returns for exchange-traded U.S. equity REITs.