What activities qualify for the material participation tests for making your short term (<7 day on avg stay) active instead of passive income/loss?

And it does not even have to be your own fault: repositioning a MF is not easy, renovation cost can explode in an unexpected way, contractors stand you up and run with your down payment leaving you with unrentable units, negative cash flow, leading to NOI loss, now you are bleeding cash and the property value does not support the loan anymore...Start with a few 1-4 family units, build a portfolio, there is a lot for you to learn in multiple categories.

I'm approaching this with a long-term mindset and plan to invest nationally, so building strong relationships with agents, lenders, and property managers in multiple markets is part of my strategy.Currently I'm analyzing where the best markets are.  

If you stay conservative, clearly separate each phase of the deal, and stress test the numbers, your model will serve you well and keep you out of trouble.

Government — 307,000• UPS — 78,000• Amazon — 30,000• Intel — 25,000• Nissan — 20,000• Nestlé — 16,000• Microsoft — 22,000 (across multiple rounds)• Bosch — 13,000• Verizon — 13,000• Dell — 12,000• Accenture — 11,000• Ford — 11,000• Novo Nordisk — 9,000• PwC — 5,600• Salesforce — 4,000• IBM — 2,700• American Airlines — 2,700• Paramount — 2,000• Target — 1,800• General Motors — 1,500• Applied Materials — 1,444• Kroger — 1,000• Meta — 1,000These are not speculative startups or poorly run companies.

Or you could reinvest in multiple smaller properties.

Was primarily thinking LTR but the STR is interesting, particularly with the option to convert to LTR, having multiple strategies.  

One thing I’m trying to think through early is how others manage the capital gap between finishing a build-for-sale and starting the next one.For those doing multiple projects, what creative financing or short-term capital solutions have worked best for you before sale proceeds hit? 

Small multifamily usually beats a SFH because multiple units help cover the mortgage, while extra bedrooms typically boost rent more than extra bathrooms (within reason).That’s why many beginners gravitate to Midwest markets, lower entry prices, solid rental demand, and a much better chance to break even or cash flow while you build experience and equity.

You can often snag multiple units for the price of one in DC, leading to much stronger monthly cash flow, though you'll typically see slower appreciation and higher taxes.