For those managing active income streams—like wholesaling, flipping, or even running a real estate business—filing as an S-Corp can significantly reduce self-employment taxes.

I'm looking to learn more about passive real estate investing, syndications, and other passive or semi-passive streams of income or equity building.

They're working class or in lower income areas. 

You’ll want to make sure the rental income comfortably covers the new mortgage, taxes, insurance, and any maintenance costs.

My idea is that if we were to be spending that money anyways, it is smart to at least explore ideas such as this where we can double the income from having 2/3/4 doors.

Obtaining valid ID and proof of income isn’t hard; for buyer prospects, swap proof of income for a pre-approval letter and/or proof of funds.

Of course, nobody wants to be the test case, but I've never heard of IRS treating money from a loan as income, ever.I think you would be better off with a long closing date on the purchase and sell your exchange property fast so you can do a conventional 1031, receive conventional financing with one set of start up fees/costs, etc.

These investors were looking for Passive income, but they didn’t realize they had to fill the role as an Investment banker and they didn’t have the skill set or systems to do that.  

., rental income reduces or we got laid off), is it a good move?

Depending on the lender and program your biggest hurdles might be credit score and income and time in job.