I've read some of the IRS audit guidelines that say about the same thing, when evaluating returns where the filer claims "real estate professional" status based on managing rentals.

Forecasting results with large components of systemic risk is gambling at best.

We have some great Sticky posts on general guidelines in the Starting Out section in the Forum.I actually want to help generate a list of questions to help determine, for a new investor, what type of real estate investing to pursue.

I do have a bunch of questions to post in the different forums, such as finding more financing resources since most banks wont allow me any more loans under the fannie mac guideline limits, Insurance has been a big pain for me also trying to find general liability coverage ( all my properties are condos/townhomes and insurance is provided for the dwelling through HOA dues ) so i need insurance, umbrella coverage for all my properties but none of the big players are willing to help so i will post in the proper forum also.

I would start with officially notifying the tenants about new ownership and new leases based on your state/local guidelines and ordinances ( you may be able to find it online) In the lease you have to clearly state the rules/regulation and terms of the lease and put the tenants feet to the fire.

Any other scenario is pure gambling from my perspective.

However, if you flipped 3 and loaned on 7 (this is just a random number selected for this example) the URS would rule that the main intent of the IRA was to be passive and since you did not exceed the 3 mark on flips, no UBIT would take place.In summary, the guideline wold include a combination of intent and quantity.

It is sometimes a gamble too because when your pursuing these kinds of units, it is likely the owner is not paying their mortgage.

They will finance up to 20 properties per borrower which is a new guideline for them (it was 10).

You should have a quick read up regarding expenses, there is a generally accepted guideline that 50% of gross rent will be payable in some form of an expense over the life of the property.