The rest are ordinary people as others.

.➡️ Operating ExpensesThe IRS lets you deduct “ordinary and necessary” expenses paid to manage your Memphis rental property and run your business (i.e. advertising, pest control, repairs and improvements, tenant screening, utilities, and more.)➡️ Property Taxes and InsuranceInvestors have to pay property taxes and insurance regularly.

@Brit Foshee yes we finance the properties.

Keep in mind by building and then selling the home you are going to be taxed at STCG (effectively ordinary income) whereas the land, could be taxed at LTCG.

When I run a Profit & Loss Report, the general categories that appear in the report are Income, Costs of Goods Sold (Property Costs), Gross Profit, Expense (Overhead Costs), Net Ordinary Income and Net Income (The words “Property Costs” and “Overhead Costs” do not actually appear in the report).

Of that, $150k would be recaptured at ordinary income rates up to 25% and the remaining $150k would be recaptured at long term capital gains rates. 

A property management company generates ordinary income and there may be some tax planning opportunities by setting up a corporation or an LLC to be taxed as a corporation.

Too many rules and you can't  even take depreciation.Stick to activities that generate ordinary income inside an SDIRA. 👍 

After accounting for ordinary expenses and taxes on that six figure salary, the numbers don't add up, so such a vague response just raises a lot of red flags.  

If you're rental is paid off, all that extra positive income will be taxable just like ordinary income.