This is a business and you should treat it as such.

There’s no universal percentage adjustment for land size because appraisers don’t treat land value as linear, it’s market-sensitive.

Treat the HELOC like a bridge: only draw what you need, keep a cash buffer, and line up your take‑out loan before you close.

If the manager entity has no real business purpose, it’s treated as an alter ego.

For instance, let's say you put the properties in an s corp and want to distribute them back to yourself, it will be treated as a sale, meaning there will be income on that. 

But if you build out the basement STR, treat it as its own activity, and materially participate, then the bonus depreciation from a cost seg on the STR portion can offset your W-2 income.

Be prepared to treat it as a part time job.

If you’ve been in real estate for a while, you’ve probably heard people talk about Real Estate Professional Status (REPS)— but most investors still don’t fully understand what it means or how powerful it can be.Here’s the simple version:If you qualify for REPS, the IRS allows you to treat your rental income and losses as active instead of passive.That means depreciation, cost segregation, and other real estate losses can actually offset your other income — even W-2 income.For full-time investors or spouses who manage their properties, that can mean tens of thousands of dollars in tax savings every single year.To qualify, you need to:- Must materially participate in their rental activities.- Spend over 750 hours a year in real estate activities.- And more than half of your total working time must be in real estate.It’s not for everyone — and you have to document it properly — but for serious investors, it’s one of the most valuable tax tools out there.Most people think wealth in real estate comes from appreciation and cash flow…But the biggest gains often come from how you use the tax code.Curious — have you or your spouse ever tried to qualify for Real Estate Professional Status?

That means you’re not blocked from using her REP qualification just because you personally don’t meet the test.Where it gets tricky: Even with her REP status, the IRS still requires that you materially participate in these specific rentals before the losses can be treated as non-passive.

While it may seem like a small election, a roadblock to progress and prosperity has been removed.Now an investor, a homeowner, or a resident  can come to Housing Court and finally be treated with dignity, respect,  and equality before the law.