Adding a luxury pool, hot tub, expansive patio, custom mural, interior redesign and furnishings elevated this home to a premium vacation rental.

Adding a luxury pool, hot tub, expansive patio, custom mural, interior redesign and furnishings elevated this home to a premium vacation rental.

Hi Glenn, interest income from loans is generally taxed at your marginal tax rate as ordinary income.

Completely renovated main level:* Demoed and redid kitchen with new appliances* Refinished floors and reglazed bathroom* Replaced the roofComplete demoed and finished the basement and landscaping* Replaced half bath with full and added 2 bedrooms* Replaced entire plumbing including sewer line* Added second washer dryer* installed stamped concrete patio and walkway plus fence* All new landscapingWhat was the outcome?

Combine this with the deliberate targeting of unsophisticated investors or those without the resources to run ordinary diligence and you have a winning recipe.

@Evan Polaski It took me at least a year of sourcing sponsors, finding investment group resources, analyzing opportunities, and understanding proper diligence; so, following a sponsor for a long time happens in the ordinary course of getting familiar with an investment strategy (particularly one that lacks control). 

I'm particularly interested in the following areas:* offsetting ordinary (w2) income with bonus depreciation (with cost seg) on RE investments as REP* 1031 exchangeI already read a lot on those subjects, but I still have questions, so I need someone with lots of patience to listen and answer my questions.Appreciate your help!

But for me sets me back few years on my goal.I also think he lacks financial knowledge to see that something is out of ordinary and should not be used as basis for future returns (e.g. low interest rates of 2022 resulting in low cap rates).

@Sheena Varghese For flips taking over a year, the IRS treats them as business inventory, so profits are taxed as ordinary income, not capital gains, regardless of the holding period.

My order goes like this.1: Front of House (unless there is an extra special feature. think a Plane Jane house with a chef kitchen or over-the-top pool and patio area)2-5: Highlights of the best features of the house.