These rules restrict the amount of passive activity losses that can be deducted against other income for taxpayers with high incomes.Form 8582 is used to calculate and report passive activity losses and credits.

@Minho LeeA couple of things to consider, if you are looking at Shrewsbury, Grafton Worcester etc, These are pretty high growth markets from what I understand although I'm not in that market I just have family there. 

For example: If I bought a house for $200K, and the quote to construct the very same house in the same location is $300K, then the value of improvements should be considerably high ($200K) and the value of the land be considered negligible (closer to 0).Of course this helps depreciate more improvements in the life of the property, but I would like to hear your thoughts on whether this logic would hold up with IRS in the event of an audit.What do you think?

They're not expecting a highly sharpened number on the first go, just a show of seriousness.

@Haylee Moore I highly recommend Jake Trimble with Brightway Insurance.

Some trends I have been looking into are modular built homes, uses for small offices in the suburbs, and MTRs in high demand areas.Interested to hear what people have seen!

@Kasim RashidBased on what you provided it seems like you bought the foreclosure on the firstNow what is not on that report is any water sewer or utility liens or potential code violations which could attach to the propertyI recommend before bidding at foreclosure to do your due diligence and home work

There are many sellers right now testing the waters with prices that typically don't make sense with today's rates.That being said, there is also a psychology behind pricing properties to create true interest and demand.  

Mold remediation and water infiltration were our biggest obstacles.

I found this excellent article this morning- folks in high-appreciating real estate markets, take note!