Hi, pre foreclosure in all of its permutations, before the bank sends Notice of Default (NOD) or efter which is state even county dependant but often starts a 4 week clock till the trustee auction are the 2nd most difficult deal scenario and IMHO only experienced investors should bother, the 1st most difficult deal scenario are bidding at the court house steps on lord only knows what is being auctioned off sometimes even 2nd mortgages, you need to do so much home work to attempt to reduce your risk at the court house steps...Pre foreclosure no one talks about these issues, always about the nice sounding stuff like "motivated seller" get a good deal etc etc both are usually not the case.- 95% of folks in pre or post NOD want to stay in their house, keep their house inspite of them 100% will loose the house at the auction. 

I would tend to agree with the other CPAs typically.The 500-hour test is one of seven material participation tests used by the IRS to determine if a taxpayer is actively involved in a trade, business, or rental activity. 

@Lauren Kormylo agree that there is a lot more risk and headache with wood burning fireplace.

Hi @Emily Gowen, whether you should sell comes down to what income (both cash flow and appreciation) you could realistically expect from the properties in the next X number of years vs. the amount of money you could make by selling now and either reinvesting or just sticking that cash in the S&P and collecting your 6-10% risk-free returns YoY.

I avoid cash as it is a safety risk to have large amounts on hand.

Keep in mind it is a risk and speculation, if something happens(market tanks, job loss, etc) then you will be out money.

You should also verify whether the lease agreement allows for ownership transfer without landowner approval.Owning the trailer means assuming responsibility for lot rent, potential removal costs, and liability risks.

If you want to start a fix & flip business that allows for bigger returns but bigger risk, that's another. 

And I also see many questions popping up about running a short term rental business, which to me is more of a business than an investment although it does involve an investment in real estate. 

Most traditional property managers don’t handle this setup due to challenges like managing tenant disputes, coordinating overlapping move-ins/outs, and the risk of Fair Housing violations when selecting tenants.