The financial benefit of reducing or eliminating income taxes very much out weighs the hassle and costs of a potential audit.You don't need anything fancy for a time log. 

Point is cash flow (positive or negative) can be inconsequential compared to the appreciation assuming you do not need the cash flow to pay the bills - cash flow is taxed, appreciation is tax deferred and can be avoided.I put forth effort to keep my RE investment significantly leveraged.

Yes, they don't have as many restrictions in terms of Attorney's needed and silly laws but, If you can conquer wholesaling here? 

I'd recommend to first look at where you'd like to invest it to see if it's feasible or if you need to adjust your buying criteria.If you're not in the market for something new then I'd look into adding an ADU on the lot and upgrading the windows on the main unit to triple pane glass so that the noise doesn't bother your future tenants.

@Alex Lickenbrock If your young family needs schools and you don't want to pay for private, you may want to consider the suburbs (and there is a range of school/suburb quality as well). 

Their E&O insurance should cover this.You may need to file something with the local or state Board of Realtors and attorney general.

Seems to me that you're not really going to get much off the 5 lots not being usable. 

that's not to say it can't be done, just that you'd really need to be getting things set up as you go. and on the passive side - i really think the more passive options, like lending or syndications, are for experienced, well capitalized investors. 

I got a $75 fine and need to clean up within 2 weeks. 

Monique - Thanks so much.