I've seen his interior renovations and insurance claims, and he's also done a few tenant buildouts for me.

Don't forget though that the moment you begin claiming this rental income on your taxes you will actually see more profits.  

Of course it is possible they are all wrong and breaking the law, but I'm doubtfulIt is possible to operate a wholesaling business as a sole proprietor and claim all of your income on your personal taxes.

Back ground of issue below from SellerPertinent facts for analysis: My wife and I acquired the properties through a quit claim deed signed by N**********, manager of McGinty Land Co.

I have the buyers sign and notarized an occupancy affidavit to protect myself from an owner-occupied claim down the road.  

Also your claim that "cash flow and appreciation are not inter related" is ridiculous.

Having a w-2 related to real estate won't qualify you There was just a tax  case with someone who worked for a mortgage company and tried to claim RE professional and it was tossed by the IRS. 

@Andre Lewis this is still an investment property for you and you are fully within your rights to start claiming this on your tax returns.  

 Do not sign a quit claim deed.  

Or the CPA might help prevent you from claiming a depreciable item as an expense, which could get you into fine territory.A CPA can knock these things out with one calculator tied behind their back.