The three categories are as follows:• Category 1: Gross income from interest, dividends, annuities, royalties, and rents, which is not derived in the ordinary course of an active trade or business.• Category 2: Gross income from a trade or business that is a passive activity or a trade or business of trading in financial instruments or commodities.• Category 3: Net gain (to the extent taken into account in computing regular taxable income) attributable to the disposition of nonbusiness property and property other than property held in a trade or business to which the 3.8% NIIT does not apply.

yeah, I forgot to mentioned that I used the BRRRR method on both of this properties.

Is there any other method that I can use to accurately get property information to compare comps or do I just rely on the Real Estate Agents in my area to run accurate numbers for me? 

Good afternoon all. New investor here. Im sure this question has been asked a billion times however I wanted some input on what the process looked like when it comes to analyzing deals? What are some practical steps I...

You see, contractors have a precise mathematical formula on how they charge, and if you think a contractor’s fee is based on their level of expertise, the scope of the job, cost of materials, and or other factors that would make sense, well then, you’d be totally wrong on any one of those instances.Contractors have their method of pricing, and it’s all about you!

My reason for looking into hiring a person with management skills/experience versus handing over to a management company is that the customary method of compensation may not fit very well in my scenario, primarily because my rental rates tend to be well above market averages which will result in a higher dollar amount going to management expenses than would otherwise be the case.

To reduce your risk of audit, you want to be sure the company you select uses the IRS' preferred method, engineering-based.

You mention that you are researching, what methods are you looking at?

There are other ways to do that then the BRRRR method for example.I am in the same boat.

If you keep looking at the appraisal, you will also see an explanation page stating why they used the sales comps as the primary valuation method.