We do background checks on potential employees. 

Behind the counter employees are a huge expense (unless you are a multi hundred unit facility) and if your competitors use them and you do not then you can either undercut their prices or reap more profits.

You COULD work for a PM company as a salaried employee in the mean time.

They will have the company policies, employees and contractors to help you manage the property. 

A quick conversation with whichever municipal employee makes that call should give you some good insight as to whether it's worth pursuing.

I was advised that an LLC should ONLY hold property (up to $1M) while the S-corp will pay employees, business expenses, receive rent etc.

It seems pretty straighforward and a sensible question.I'll be investing starting in August when I have access to my employee 401k, which I will roll into the Solo 401K I have set up.

The fact that it's free for an individual freelancer without employees is also nice.

Your current business entity can be your trustee.Get a Federal Employee Identification Number for free at IRS.Gov.

What he is doing is using your project to keep his surplus employees working.