My business partner and I are both W2 employees for large companies with good salaries.

I am a contractor and can do all the work or have employees that can.

I was lucky and got to work with my dad (as an employee) who was a real estate investor.

@Anthony Gayden  Thank you for your service as a federal employee! 

Ask open ended question.Never pay for any part of the work up front.Never purchase the materials for the contractor, because they can claim they are your employee and not a contractor, then you could be liable for them and the withholding taxes associated with having an employee.Ask to see some of his work.

I think maybe what folks want is to be self employeed IE a self employeed landlord.  

Final regulations provide limited guidance, but IRS gives a safe harbor.The new tax break applies to qualified business income from a trade or business.The final regs continue to refer to the standard under federal tax code Section 162,the statute that generally governs the deductibility of trade or business expenses.Unfortunately, this standard is somewhat unclear in the context of a rental activity.That’s because it’s based on facts and circumstances specific to each taxpayer.Among the relevant factors: Type of property leased (commercial or residential),extent of day-to-day involvement by the lessor or the lessor’s agents, lease terms,number of properties rented and other ancillary services provided under the lease.The safe harbor applies if at least 250 hours are devoted to the rental activityby the property owner, employees or independent contractors in a year.

However, you are right that most lenders will want to see a 2 year seasoning period for all income that is not your basic W2 employee income (commissions, self employment income, etc.)

However I do know as a government employee, one of the questions on a security clearance is, “Do you have any foreign investments?”

As a side note, in 2002 we were contacted by an employee of the Texas Securities Board who told us he was investigating whether or not we were violating Texas Securities Code.