@Brandi KeppleAs an LLC, you may be required to have keep a set of records to substantiate that you are a business.

and, if it "just has some superficial things that need fixed" w,hy would you even need a substantial rehab budget?

For those of us that do currently generate substantial taxable income from our rental properties (with or without a manager), something I found just kicking this topic around on line below:"Rental Property as BusinessOwning rental property qualifies as a business if you do it to earn a profit and work at it regularly, systematically, and continuously.

Examples of businesses conducting eligible construction activities are residential remodelers; commercial and institutional building construction contractors; foundation, structure and building exterior contractors; structural steel and precast concrete contractors; and electrical, plumbing, heating and air-conditioning contractors.Here are some additional links I found:Home Builders Safe Harbor in Code Sec. 199Section 199 Real Estate Developers Stake Your ClaimSection 199 as it applies to Construction and Real Estate PDFCourt ruling on Substantial Renovation@Steve Hamilton

I concede they take longer to catch up but sooner or later they will be substantially higher. 

And may be substantially less.

However; if you are buying properties that are in disrepair and need substantial rehab and their are multiple buyers you will need a relationship with a banker who will move quickly so you can get the deal done first.

All contracts, options, or other devices not based upon a substantial consideration, or that are otherwise employed to permit an unlicensed person to sell, lease, or let real estate, the beneficial title to which has not, in good faith, passed to such party for a substantial consideration, are hereby declared void and ineffective in all cases, suits, or proceedings had or taken under this chapter; however, this section shall not apply to irrevocable gifts, to unconditional contracts to purchase, or to options based upon a substantial consideration actually paid and not subject to any agreements to return or right of return reserved.History.

., has increased substantially.

We could only use the resort management just like you are talking.Once we figured in purchase, HOA dues (which were huge) and the substantial special assessments, we were negative by a couple of percent.Here are some downsides to me.