Based on your plan you would be taxed at ordinary income rates, not capital gains.If you did that many houses you would be considered a dealer and may be subject to self-employment tax as well. 8)

I give my tenants a drug screen. 

I had gotten the idea because there was a mobile home dealer in the area who would finance homes and allow customers to pay that way.

While waiting for my investor to show up I literally witnessed about 4-5 drug transactions take place 15 feet away from the property.  

I'm a General & Manufactured Home Contractor, Manufactured Home Dealer, RE Broker, Developer, Investor &  Property Manager in North San Diego (Leucadia).

I believe he had a drug problem in the 70's or 80s which he admitted. 

The fourplex next door went through a lengthy foreclosure process (before ultimately being renovated by a different investor) and became a home for squatters, suspected drug use, and many other challenges.

More likely it would be used by drug dealers, terrorists, etc.  

If you flip the property, meaning you didn't place the property in to service as a rental, you sold instead, you will be classified as a dealer by the IRS, your properties will be considered your inventory and you will be taxed on your profits at ordinary income rates (whatever tax bracket you are in that year) + 15.2% self employment tax.

The person at Section 8 who was responsible to make sure we got paid must have been on drugs because we had to constantly call Section 8 because the rent was not paid on-time and when we called this clown handling her account always gave us a story.