Here are the ways you can qualify for material participation per IRS publication 925: https://www.irs.gov/publications/p925#en_US_2023_publink1000...Material participation tests.You materially participated in a trade or business activity for a tax year if you satisfy any of the following tests.1.

I also know that this strategy is often used to leverage available cash for multiple deals.However, as a new investor, I've decided to focus on purchasing one property at a time and go through the learning process until I complete a refinance.Only after receiving the funds from the bank would I consider rolling into another deal or multiple deals.In this situation, do you think it's better to still take the 80% loan from a hard money lender, or should I use the cash I have and purchase the property outright?

Example: 250 Units + Condo project with rent roll.  

So good to know there is another option for those that want to test the waters before jumping in.

The government wants to force landlords to cover the cost of cooling renters, but that same government doesn't protect paying customers from rolling blackouts.

The benefit of going conventional is being able to purchase an MFH without the stringent property guidelines, self sufficiency test, and longer escrow on an FHA loan. 

It seems like you’re positioning yourself perfectly for that with the 50% rule, 750-hour test, and material participation.When it comes to underwriting multifamily deals, just keep in mind that depreciation is not considered part of operating expenses, but mortgage interest is.

But I decided to test the Air BNB venture.

The profits from my business were rolled into real estate, and then the real estate profit were rolled in to buy more real estate.The key is to be consistent, and to have a plan with what you are buying, and have an exit strategy for each dealGood luckGino

Current plan is to take out an equity loan on the property (tax rolls have it at ~$300k) and use some additional cash to build 4 units, then refi, then build additional units until we have ~20 doors on the property.