We ran our small mom & pop lending company as sole proprietors for years in CA, doing what you do.

@Ned CareyProperty flipping, even if you only do one as a sole proprietor, is an active income business reported on Schedule C.  

So, it's treated the same as if you are sole proprietor.

i misunderstood your overall argument (because i did not read the entire post) :oops: if you're a sole proprietor, or just Joe investing in rentals and your plan is to amass many rental properties in order to build a gross monthly income of 50k a month - then financially speaking - you are probably right (again, i'm no CPA).but if someone is interested in building a business and a business reputation, offering services to the public such as rehabs, construction, rentals, commercial - an LLC or CORP offer maximum potential for growth.what do you think?

When bad things happen to a sole proprietor, your personal assets are at risk.

This is true whether the plan is adopted by you as a sole proprietor, an LLC, or a Corporation, etc.

. , and what taxation should I choose.Regarding the structure, LLC may be cheaper in some states, with less mandatory formalities than a Corporation.As a general rule, for buy and hold properties bringing passive income, it is often preferred not to be taxed as C or S corp, but to use Partnership or sole proprietor taxation.For active income, it is often preferred to be taxed as C or S corp.

Basically, I am in the process of restructuring from working as a sole proprietor in my own name (I know, I should have done this sooner), to having a holding LLC that I own, which then owns an LLC under it that owns each individual property. 

Hi Adam, As an inhabitant it is basic for me to meet the landowner/proprietor when I do a stroll around review.

If you are a single proprietor, you are taking risks for yourself.