The IRS wants to see that you’re actively directing and managing the business — things like approving budgets, coordinating repairs, analyzing performance, and making operational decisions — not just reviewing reports or responding to occasional updates.So while it’s not impossible, it’s rarely achievable unless you’re very hands-on, even from a distance, and have solid time logs to back it up.If you’re interested, I can share a free REPS tracker that helps you record and organize your hours.

Since we want to be conservative with our underwriting, we found the county’s Property Tax Estimator tool: https://cuyahogacounty.gov/fiscal-officer/departments/budget...Our current thought process:-Look up the correct tax district and current value from county records-Enter the property’s purchase price as the new market value in the estimator-Use the 2026 estimated tax amount for deal analysis, since that’s likely closer to where taxes will eventually adjustFor those of you investing in Cleveland:-Does this approach make sense?

That being said, I reccommend using a quick hard money loan to finance the reno budget and then refi immediately to stabilize the debt with market rents.

I'm coming up with my budget now.

Budget for more frequent cleaning and maintenance.3.

Relationship lenders are the ones who step in to work with the borrower and keep projects moving, whether that means increasing the loan amount, reallocating budget line items, or simply being fair and reasonable during the draw process.

If you aim too high, you may miss out on deals that are still solid.Start with a clear budget and realistic ARV, then see how much buffer you can safely leave while still hitting your investment goals.

Keeping in mind budget constraints.

We have monthly budget update meetings and every quarter we review where we anticipated vs. where we are at.

I am making sure to budget better now.