Update: We ended up backing out of the commercial deal, way too many issues going on and shady practices that we were not comfortable engaging with.Now the question is what to do with the chunk of money left after we pay taxes.

Practice running the numbers.

If not, even though you are a re pro, losses are passive & deductions are limited.There are 7 scenarios that will qualify as material, and you only need to meet one:*500 hours*Substantially all participation*> 100 hrs and at least 1/2*Significant participation*5/10 years*Personal service activity w participation in last 3 years*Continuous participationTo materially participate, you must be involved in the operations of the activity on a regular, continuous, and substantial basis.Once you pass the pro test, the material participation often comes along for the ride.You can elect to aggregate all rental real estate for purposes of measuring material participation under Sec. 1.469-9(g).Your time spent on all your rental properties (STRs don't qualify) counts as one activity, making it easier to materially participate.In order to make a strong case with your CPA and the IRS you need to document your hours.Best practice is an hours log where you are as specific as possible.

Research the appropriate laws for your property and follow best practices to avoid any discrimination accusations: use the same criteria for everyone who applies, know what the protected classes are, which questions are legal to ask and which aren't, and only deny applicants for legal reasons etc.

In practice how Mello Roos works is you create a political subdivision and apply to the county they approve the area for the Bond issue.. you need Bond council and a investment bank to create and sell the bonds. once the Bond issue is approved this allows the developer to get a Bridge loan to build said improvements ( that are usually 5 to 50 million or so) Once improvements are in  and taken over by the county the Bond money is released and is used to pay off the Bridge lender..

Using a queen sheets is a very practical solution since the dimensions are close enough, though like you mentioned it will be a bit long on one side.

As you say, the concept is great and true, but the proper application in practice may not be as advertised.

This is where there is a gray area.Many consider wholesaling practicing real estate without a license and there are laws in other states cracking back against it.

Seems like a really sound practice.

I’m looking to understand industry standards and best practices.