Convert primary and income properties to RE invest holdings

[Dante G.]

We have been looking for ways to invest assets to build long term wealth and income. Have been investing in stocks and employer sponsored 401's and not impressed with performance and long term prospects if we maintain this course. We realize the growth potential in real estate and gauging current economic conditions and the likely pullback we feel that investing in real estate is inline with our long term goals. 

As part of our educating ourselves on RE investing we are exploring the possibility of taking advantage of the equity within our primary and income properties by forming an RE investment company, transferring ownership of these properties to the company so we may begin to take advantage of existing tax rules and tap the equity for purchasing new properties. 

This is our current thought process:

1. Sell primary property to our investment company for cost to payoff existing mortgage (ex: existing mtg amount $200k property value $400k)

2. Sell existing income property to our investment company for cost to pay off existing mortgage (ex: existing mtg amount $50k property value $100k)

3. Once transactions are completed and any "seasoning" requirements have been met we would tap into the $250k of equity to fund future RE purchases.

4. Future eligible improvements and expenses for the maintenance and operation of these properties would be taken under the business tax as applicable.

5. We would pay rent to our investment company and for all intent and purposes we would be renters and not property owners.

We have more than sufficient funds to cover all costs involved (down payments, closing costs, etc) and wanted to get additional feedback from the community to further evaluate this approach.

Obviously this is the short version but hope it provides enough details to allow for feedback and further  discussion.

Thank you in advance for your time and thoughtful consideration.