We would like to put each of these properties into individual "disregarded LLC's" for the liability protection but we don't want to trigger a capital gains tax situation.  

Obviously there is a lot to discuss on this topic, but for a very quick glance, here are a few pro's and con's to consider when thinking about section 8 rentals:Pros:Guaranteed Rent Payments -> The government pays a significant portion (if not all) of the rent directly to the landlord, providing a reliable and steady income stream.High Demand -> There is often a high demand for Section 8 housing, reducing the risk of long vacancy periods.Cons:Inspection and Compliance -> The property must pass an initial inspection and comply with health and safety standards set by the local housing authority.

I have been interested in real estate for a few years now and decided to finally pull the trigger.

I am not at all sure that a first floor formerly retail space like we have so much of in OTR can be converted to residential use without full code compliance even when the building is zoned for mixed use.

I could always do this but now there is an additional incentive … compliance with AB-968.

Quote from @Trevor Powers: Network, read/listen to books, and don't be too hesitant on pulling the trigger on something you believe is a good deal.

In Pennsylvania, transferring property between LLCs triggers realty transfer taxes.

To ensure compliance, it's important to have your IRA custodian review the loan documents to confirm that the carve-outs align with the IRS guidelines for IRA investments in real estate.

However, when you sell the individual condo units, capital gains tax will be triggered on the gains attributable to those sales.Allocation of Basis: The original purchase price and any improvements made should be allocated among the individual condo units to determine the basis for each unit.Gains Calculation: When selling a unit, the gain is calculated based on the difference between the allocated basis and the sale price of that unit.Partial 1031 Exchange: You may be able to use another 1031 exchange to defer gains on the sale of individual units if you reinvest the proceeds into other like-kind properties.

Lots of Compliance to tackle.