I have been told that forming a business in Nevada, from out of state is an automatic red flag with the IRS. 

The  big thing that's a red flag to me in your plan @Brian Gibbons , is that there's no set-aside for taxes, insurance, vacancy, maintenance or cap-ex.

@Al Cordova undefinedI see a major red flag here, you should see it as well. 

I could have bought my garage full of red sports cars a long time ago, but I drive an old toyota because it get's me where I'm going every time, it's a depreciating item, taxes are low, and I'm in no hurry.  

You mentioned being a GC in Redding, have you built any homes there yet, and how's the market? 

That's a big, waving red flag.  

@Chris Petrillose  I aam NOT sating Ithaca is bad, not at all.I love BIG RED (Cornell) and Ithaca.I am saying get out of the villages and MOVE to Ithaca. 

You may not be able to expand on the lot.3) Oil is red-flag in my books.  

What red flags should I be looking for? 

Take a look at crime plots such as Trulia's heat map, and you'll see the areas in red to avoid.