Catch up provisions aren't included in every offering, but they're certainly not out of the ordinary. 

However, if you are transferring some of the proceeds from the rental business into the property management business you are essentially converting some of the income from rental/passive to ordinary income.There are Pros/Cons for doing thisCon - Your property management income will be considered ordinary income subject to self-employment tax.Pro - You may not be put a portion of the property management net income into a retirement account.Con - You may now need to file additional forms with the IRS increasing your accounting fees.You may also need to file a payroll tax return.Pro - If your property management company runs as a loss and you were not able to take the losses on your rental business - you may not able to take some losses there were previously unavailable to you.

But even if you only slow down the flip to more than a year that changes the taxability from ordinary income to capital gains.There are three things to this strategy.1.

Does it all equal out in the end because we are getting to write off the mortgage on our primary residence off our ordinary income or does it make sense for us to have a loan on the investment property itself?

The rest are ordinary people as others.

First impressions are important and can attract quality tenants.Offer amenities: Consider adding value by providing amenities such as laundry facilities, off-street parking, or outdoor spaces like a patio or balcony.

@Sam Stolt...sorry for the real late reply....been on vacation :)If you have an insurance claim and the adjuster sees something that makes them question if something was done out of code, they may investigate it and if they find its was not done to code or w/o permit, they could deny the claim....they would have a good case to deny it.... depends on the insurance company.My own personal experience...... my own residence..... had 2 small room additions that we knew at the time of purchase were not done with permits, but were very basic and we had no code concerns...... 6 years after purchase we got a call from the city...wanted to know if we ever finished the work that had an initial permit pulled on...never got final inspection or approval....... turns out the original owner had started a permit for an "enclosed patio".... they then built full on room additions.

.➡️ 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.

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.