Some tips:1.

My question for experienced MLO's out there is, what are some tips you'd give to a new MLO looking to build business?

I understand for tax purposes that I can only take two-thirds of the expenses related to the house to offset the rental income.

Then compare against the cash flow after taxes from the business. 

I feel Ike they pivoted quite a bit in the last few years since city and subsequent county license requirements spurred an STR plateau and the motivations are a bit deeper and multi-purposed now.Take parallel economies, such as Uber/Lyft, the ONLY two TNC license holders in the state and each year pay an excise tax of a few hundred thousand a piece, if not more (just for the permit, not including the whats taken from drivers).

It's crucial to align this decision with the nature of your income sources and their respective tax treatments.

This strategy, if combo with REPS (real estate profession status) basically checkbox on your taxes is key to canceling out full-time W2 employment.If this is new to you... 

Domicile: WA State (income tax free)Property location (Texas): (income tax free)LT gains + Depreciation recapture ~ $300k on a $500k income property ~effective / average tax rate = 12% for past umpteen yrs (relatively low income, avoiding IRMAA and doing Roth rolls (no 'realized' income, just transferring from tIRA to Roth = vast majority of annual MAGI income)In the end (coming soon, ~17 yrs) ALL remaining estate will go to charities / Charitable Foundation / DAF.

If so, would this still cause issue with the S-Corp tax rules?

The slightly confusing part is the Business License Tax Certificate.