Paxton,Normally the coastal exposure is looked at by the Insurance companies in distance to the coast. 

This will allow him to give you a better picture of steps to take to limit your tax exposure.

I was a Personal Banker before that which gave me some good exposure to lending, primarily doing refinances and referring new purchases or larger deals to a mortgage partner.

I think you'd find it difficult to get where you want to go with your $85k and I don't think use of those funds for that purpose puts you in a good risk profile with regards to capitalization and exposure, personally.ID of a multi-family that you can rent out...

What is your ultimate exposure.

Their only exposure is a personal home, the appreciation of which seems like "magic."

I appreciate your insight I have very little exposure to the outside real estate market so its nice to get feedback from people investing in other parts of the country@Nathan G.

This will make the future sale and all income easier to track and also reduce my liability exposure.

I assume this creates a liability since the asset (the flip) is belonging to the same company that is doing the contracting work, so we could have exposure if we were sued lets say. 

I currently own a 4plex and a SFH, and since deals in my area are not what they used to be (i am very numbers driven and disciplined), I started looking at passive investments as a different avenue for RE exposure.