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Sounds like you need to consult with the your tax advisor.
I haven’t done it but it does seem to be a viable strategy since REP status with cost segregation studies would give you the ability to deduct rental losses against W2 income. The white coat investor group on Facebook discusses this a ton.
Subject Expert
750 hours a year of material participation breaks down to around 15 hours a week. If you just have long term rentals, that seems pretty hard to do.
The strategy works better with short term rentals as you only need 100 hours and less than 7 days average stay for any new property you acquire, or if you’re trying to take bonus depreciation on the other properties, you at least get more hours by interacting with guests, cleaning the property, etc…
It’s much more common to use REPS if you have value add multi-family properties, and/or are raising private money to grow your real estate empire as those take up a lot more hours