Value add real estate development will take a big hit. 

As soon as that profit hits our account we will be ready to get the line of credit and start buying wholesale deals to BRRRR.

I dont want to take such a big hit!

I was looking at some single families in Riviera Beach, hitting great cash on cash ROI.

---Once you understand the risks, look at the potential rewards and the likelihood of hitting those marks. 

I know Jacksonville FL has been very popular on BP for the last several years.Inventory has been crazy low even in the middle of a drawn out pandemic.However,the low inventory didn't truly hit home until I had a few vacancies this month and asked my agent to list them.As is customary,I went on Zillow ,typed in my zip code and adjusted the filter for number of beds/baths and the desired rent amount.To my amazement,in my entire zip code,only one other unit was on the market for rent in my price range <$1000.Then the agent sent me "rental comps" the next morning in order to advise on a reasonable list price.It turned out 4 out of 5 units on his comps list were my recently rented units as well.At that point,it was clear we were our own competition.Nobody is selling.Whatever is coming up for rent is being snapped up in record time.The following week,a duplex came up for sale on MLS at the beach for $369,000.My notifications alerted me and I thought that was a fair price since I could probably get $1700 in rent for each unit with minor cosmetic upgrades.I checked "days on zillow"....8 hours!

Maybe take less of a percentage but give yourself a higher percentage chance of hitting a home run. 

I don't have to hit a home run and realize tremendous gain in year one.

So, you really shouldn't have to worry about huge tax hit when it comes time to do your return. 

It may not be a home run but I think it could be a base hit.