Originally posted by @Patrick C.

Make sure to hire an attorney to review both the A to B contract and the B to C contract.

Section 469(c)(7) provides an exception that allows qualifying taxpayers to treat rental real estate activities as nonpassive, enabling them to deduct losses against other types of income.

I found a cheap distressed house in a C class neighborhood and lived there for 2 years.

Our primary defense against this in C-class housing is to rely on deadbolts for entry doors. 

Class B - Class C, anywhere in GA would be ideal but open to anywhere to invest.

But still it is illegal i think b/c of the door or maybe ceiling height.  

@Scott ChampionRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a Class A property in Class D area, what quality of tenant will you get?

The area is class C and I don’t expect much appreciation. 

-Wholesale deals are all over the place - we've seen some great deals, some ARVs that are ridiculous, and some that are priced more than it would fetch on the MLS-C neighborhoods are going anywhere from 70 sq ft to almost 200 sq ft in variable conditions.