IRC 469(c)(7)(B) and Publication 925 back this up, stating that the active participation of just one spouse can turn the entire rental activity non-passive.It sounds like your CPA may have misunderstood this rule.

Setting up a new LLC for each flipping project is a common approach to limit liability, but as you mentioned, it can get tricky with all the bank accounts and bookkeeping.One option to simplify things is to set up a holding company (LLC or C-Corp) to own the individual LLCs for each project.

I am a Capital Raiser for B and C class, value add, Multifamily Properties, ideally 20+ doors.

Sounds like they've been around awhile and have their "old-school" way of doing things and may be a bit behind the times with technology and standards.Overall, they seem to be treating your property like a Class C rental.- What do you feel the Class is?

Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”Key metrics for each Property Class:Class A Properties:Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.Tenant Default: 0-5% probability of eviction or early lease termination.Section 8: Class A rents are too high and won’t be approved.Vacancies: 5-10%, depending on market conditions.Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Class B Properties:Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.Tenant Default: 5-10% probability of eviction or early lease termination.Vacancies: 10-15%, depending on market conditions.Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.Section 8: Class B rents are usually too high for the Section 8 program.Class C Properties:Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years.

If you’re exploring multifamily investing, definitely take a look at the midwest.Columbus has solid B/C class neighborhoods with multifamily properties under $300k hitting closer to the 1% rule.

I sold the Class C with a capital loss and am selling the other Class C, both bought in 2023.

C market and below sfr flips may look sexy on paper when you look at market rent and lower costs and turnkey etc etc, but they introduce many pitfalls, particularly in KCMO C class proper, where troublesome tenants can acquire city funded attorneys to drag out evictions.

, pets stay FREE(0 bookings)Property C - Strict to FLEXIBLE Cancellation, pets stay FREE(11 bookings, 2 inquires)Property D - Control, no changes (STRICT cancellation, no pets)(1 inquiry)ALL properties I made sure "opportunities" where near max (office space with a comfy chair, etc)It's really interesting that I opened up pets to 3 of them, 2 of them I added flexible cancellation and the ones with flexible cancellation SOARED.Had nothing to do with me as a host, or my properties.

Remove those and the Net S8 Rent will be market rent.Typically, the only way to get more than market rent is by buying in Class D areas and hoping a S8 tenant will live there instead of a Class C area.Keep in Mind: TENANTS QUALIFY FOR SECTION 8 FOR A REASON!