I wouldn't worry as much about the taxes as I would about the way dealing with the banks changes when you change to full time with no other source of income, because it does change. The rates you get, regardless of your FICO, will be more, and qualifying will be harder. If you're only flipping, you may want to do some buy and hold to add other income before you quit your job. Maybe buy multi-unit to live in and receive rents. Then, refi with cash out everything while you have your job, then go full time. Or buy something larger with lots of write-offs that you can lease purchase unit by unit to buyers to spread the gains over a longer multi-year basis. As long as you keep your pace of buying and renovating to keep your write-offs high enough to offset the passive income, you'll do fine.
Sep 28, 2009