Being he is not making a living in real estate I would not think his dabbling in real estate rises to a level of business activity. I would put the one house he bought, and is selling on schedule D (investment). The homes he is buying, and renting out I would put on schedule E (residential rental). flipping house is a full time endeavor to be a business on schedule C, but that is my opinion, and each case has to be looked at to determine which way to go.