something that seems to surprise new investors is that transacting real estate is expensive.in Pittsburgh transfer taxes are 5%, usually split between buyer and seller. 

Here are the pros as i see it: easy (no purchase necessary, you know the property), likely prop 13 property tax discount, possibly below current rate loan.  

Also LLCs cant use small claims court here.

This should include potential rental income, expenses (including property taxes, insurance, maintenance, and potential vacancy), and your expected return on investment. 

After looking into it more, I'm concerned about potential tax implications and legal issues, such as piercing the corporate veil.

People are going to start thinking about spending their tax refunds in the middle of January.

How long will they have to cover property taxes etc for the decision they make?

I hope you or someone is at least keeping an eye on your properties for break ins, squatters, roof leaks, temperature control, frozen pipes (if in cold climate), if you have a basement and sump pump goes out leading to water damage etc.I just talked to two investors in California that have let their properties sit vacant (no mortgages so paying property taxes and insurance).

If you don’t pay the tax when you transfer the stock to them they’re going to owe the taxes on your gain and you haven’t really “paid them back”. 

Also, we'll need to know what your other expenses will be (taxes, insurance, etc.).