I’ve been hearing from a lot of investors lately about how renovation costs keep sneaking up — whether it’s materials, labor, or even permit delays.

If you do the work yourself, you can charge for your time at a fair market rate, but be ready to document hours and materials in case questions come up.

My local banks either want too much down or want me to have a material list of absolutely everything the property needs.

If I analyze, study, purchase, renovate all the properties for myself (not other investor), it is considered "materially participated correct?

Nice try though.Myth 4: I'm hands-on, so I materially participate"Material participation" is defined by the IRS, not by your Facebook friends and not by YouTube gurus.

Relatively new to real estate, and I've been lurking the BiggerPockets forums and learning material for quite some time now.

If your average stay is ≤7 days and you meet the material participation test, you can still treat it as an active business.

The main point still stands, though: if you qualify as a REP or materially participate in STRs, those deductions can be powerful.

That means cost segregation and bonus depreciation are already available, and those deductions can offset other income if the owner materially participates (already similar to the "STR loophole").

@Lawrence Cargnoni, To your questions:Option 2 (Missouri LLC owned by a Wyoming holding company):You might avoid registering the Missouri LLC in California if you’re not materially managing it from within the state.