Buying a business and organization forming

[Ryan Kowalewski]

Hello, I'm currently looking at purchasing a business and having a hard time determining if my advisor has a full grasp on what I'm doing so here are the details. 

I am buying a business for $700k (100k property, 100k equipment, 500k inventory). He is suggesting that I create a S-Corp for the business and a LLC for the property. Then I pay rent to myself from the S-Corp to the LLC to make that income passive and thus avoid the self employment taxes. Is this a legitimate strategy?