In most states, the ownership of real estate does not constitute the transaction of business.

I'd be surprised if a licensed broker would accept payment for "...making sure the language in contracts are (Sic) right..." since this is explicitly not a brokerage function, but would constitute a function considered 'practicing law'.  

Good wholesalers, who know what constitutes a deal, are a valuable asset. 

Paraphrased for the layperson with emphasis added :)Crediting rents to the sale price from a required payment (rents) reducing the agreed sale price constitutes a financing agreement, since non-payment of rents will cause a default and title will no longer pass. 

Most people don't know what constitutes positive cash flow.I'd also say read up on all Rich Dad books if you are wanting to go the passive income route and avoid the dreaded 'job'.

Courts also allow an equitable interest to be gained by a tenant for costs of maintenance.Do use two separate contracts, charge market rents and don't give credits of payments to the sale price, that constitutes a financing agreement.An option may not require ANY performance to be required by the optionee (buyer), if you do, like requiring maintenance or paying on a lease as agreed, then you don't have an option and money paid on that contract may defined differently, you may end up returning the option price.If you lease it, you'll later receive 75% of the rents as an offset to your mortgage debt to qualify on future loans.There is no issue with a VA loan after one year of occupancy, you can rent it.

It seems the IRS itself isn’t even always sure of what constitutes a prohibited transaction until they decide something is.

Personal property assets can be exchanged for other personal property assets but the rules of  what constitutes like kind are much more stringent.  

But buying and holding real estate, liens, notes etc is NOT transacting business.In the case of Memphis our advice came from the Tennessee Secretary of State:The Tennessee Business Corporation Act (TCA 48-11-101 et. seq.) does not define “transacting business,” but does provide the following non-inclusive and non-exhaustive list of activities that do not constitute transacting business in Tennessee: Maintaining, defending or settling any proceeding, claim or dispute;Holding meetings of the board of directors or shareholders or carrying on other activities concerning internal corporate affairs;Maintaining bank accounts;Maintaining offices or agencies for the transfer, exchange and registration of the corporation’s own securities or appointing and maintaining trustees or depositories with respect to those securities;Selling through independent contractors;Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside Tennessee before they become contracts;Creating or acquiring indebtedness, deeds of trusts, mortgages and security interests in real or personal property;Securing or collecting debts or enforcing mortgages, deeds of trust, and security interests in property securing the debts;Owning, without more, real or personal property (including, for a reasonable time, the management and rental of real property acquired in connection with enforcing a mortgage or deed of trust if the owner is attempting to liquidate the owner’s investment and if no office or other agency, other than an independent agency, is maintained in Tennessee);Conducting an isolated transaction that is completed within one month and that is not one in the course of repeated transactions of a like nature; or Transacting business in interstate commerce.We have set up hundreds of clients in 9 countries so we make sure our advice is good.

I remember having a conversation with an asset manager who tried to convince me that the commerce clause of the Constitution allows them to ignore local laws.