Because they were primary residences, we had homesteads on all of them.

This gives them the same protection and coverage under your policy as you have as the primary policyholder.

The biggest challenge is a lack of quality homes and a rapidly increasing demand for vacation, second and primary homes.

@Landon Sheveland People do fix and flips while living into the property to classify the property as primary residence and not pay any capital gain taxes. if that is your intention, don't use LLC to establish this as your LLC.If your goal is different compared to what I said above, you can use LLC.

Live in each every two years and sale for the primary residence tax advantage.  

I would tell people today that if you buy a primary residence expect to stay in that home for atleast five years, especially with a FHA loan which has lower down payment as the current forecasts for home appreciation or very low which with closing costs on the buy and sell, it will take several years to have equity in the property and enough to be able to sell, so that is something also to consider.

I tend to agree that selling seems like a good option, especially since your rental income will not give you a good yield on current property valuation.Did you live in the rental as primary before?

I completely renovated the primary and guest bathrooms.

I used them all as primary homes then moved and rented them out.

Real eatate is his primary focus.