However, this is a difficult qualification to meet, especially if you have a full-time job outside of real estate.Don’t worry if you aren’t able to qualify for REPS status, because there is another strategy that is referred to as a “loophole”, which is the STR strategy.Per Section 1.469-1T(e)(3)(ii)(A): there are six exceptions where your rental property income is not automatically considered to be “rental activity” and thus may unlock the door for being able to offset these losses against your active income.The average customer use is seven days or less.The average customer use is 30 days or less and significant personal services were provided (for example, daily housekeeping).Extraordinary personal services are provided, regardless of the duration of customer use.The rental is incidental to a non-rental activity.The property is available during defined business hours for non-exclusive use by various customers.The property is used in an activity conducted by an S Corporation, partnership or joint venture in which the taxpayer holds an interest.If your property qualifies by meeting one of the exceptions above, the next step is to demonstrate material participation in the rental activity.

If you are all going to be active in the business, then you can probably structure as a joint venture.

I've had clients add me as a collaborator on their properties in Stessa, and some that just send me the tax package report, both work perfectly for preparing taxes.

@Cody AndersonSetup a good contract with all the possibilities if someone wants to leave the venture.

Some preparers may take your word and just say have your logs ready in case of an audit.

Play ball with them.Be prepared to follow through on the agreement.

Buying, fixing, and flipping REO properties is a solid strategy, but success lies in preparation.

So here is something I wonder if you ever considered in this venture; what if you really suck at it?       

To prepare, focus on saving for a strong down payment and maintaining a solid credit profile, as both are critical for competitive financing.If possible, look into FHA or conventional loan options for owner-occupied properties, which may offer favorable terms, especially for first-time buyers.

Also, be prepared for potential delays and unexpected costs, especially with long-distance renovations.