Quote from @Josh Lewer: @AJ Wong I like the idea, but a boutique hotel is already an active trade or business because it provides substantial services such as daily cleaning and concierge.

I believe that sums up the dilemma many in the rehab space are facing.I've been doing some fairly substantial mix-use renovations and even there the numbers are tight due to material and building code demands.

No matter what, unless I had a credible and substantiated team already there on the ground, who I trusted with viable perspectives, I would have to lay eyes on the place. 

@Wayne Wollesen Great tips in this forum regarding understanding the context in which Cost Seg is done and how it may or may not impact the bottom line on your tax return depending on material participation, real estate professional tax status, classification as short-term rental, substantial services, etc.

What a strange concept, I thought.But in my research I am now wondering what some experts might think about.....what I'm thinking....Ok, so if I finance a conventional mortgage (conventional as in amortizing), the principle adds a substantial amount of cost to my monthly payment.

Maintaining proper records is essential in case of an audit, as it allows you to justify and substantiate your deductions and effectively defend your position if questioned by the IRS.

We’re reviewing a stabilized 14‑unit in Memphis, and I’d like to get feedback on how others would underwrite itAsset: 14‑unit stabilized apartment buildingIn‑place cap rate: 7.9% (verified NOI: $76,680)Upside: Clear path to 15%+ cap rate through rent stabilizationProfile: Profitable from Day 1, with substantial upside already built inI’m curious how other investors here would underwrite this type of deal.• Would you treat the subsidized tenant base as stable income or discount it?

With rates shifting and lending tightening, I’m curious where you think the note market is heading.

I doubt making someone a managing number does anything to substantiate that  they are an actively involved.

Now if only the government would get their head out of their A$$, we rest easy knowing 2026 is going to go gangbusters!