@Matt Fore Yes it does have to be capital gain although there is some language that just references "gains" so we are waiting on additional guidance as to whether ordinary gains would qualify.I think the reason capital gains need to be invested into the funds instead of straight cash is that by recognizing a capital gain you are selling something which promotes economic activity (selling stocks, businesses, real estate, etc.)

Reality would have proven the need beyond the shadow of a doubt.I believe the protection of a LLC is primarily physiological in nature.

@Tom Gillotti  Nothing has been proven true or false , its your word against the builders .  

Another benefit of a good handyman is that the tenants will recognize him and it's not a new, random face on the property.

I've personally never told someone that its not going to be a good fit if they are shopping me around hahah Saying that pretty much breaks my promise that I'm working with the borrower's best interest in mind and if for some reason I'm not able to recognize the best program for that person and another broker is then kudos to them. 

AZ will recognize a TX LLC – on AZ’s terms and under AZ’s rules.

This is even more so if it's just a few houses, you need many to spread the costs.Cheap houses work and it's been proven, you just need to be the right fit.

I recognize that I am in one of the hottest housing markets in the country.

It takes a LOT of marketing to build a brand that people will recognize. 

We have such low inventory with virtually no builders building spec homes around here - if the numbers dovetail in with what the market will support, I'm hoping it's a strategy I can repeat, then move into actual spec homes once that model has proven itself.