I am not a CPA...I do believe that both of those incomes would be considered passive investment income and your tax treatment would be identical.  

And, once it has elected to be taxed as a corporation, an LLC can file a Form 2553, Election by a Small Business Corporation, to elect tax treatment as an S corporation.

IRS regs on installment sale tax treatment is:   tax on the gain of the house is due in the year of sale for inventory (buy, fix , sell),  which will kill you.  

This would likely net them much more their  asking price while getting more favorable tax treatment.

CPAs booking their clients flips as capital gains are going to be in a world of hurt should their client ever undergo an audit.If you were to do the one-off flip, I can see the argument for capital gain treatment.

But I am now thinking of a combination of enzymes to attack the source with a follow-up treatment with ozone.

Assuming the purchase price for the 30 units is an investor friendly $1 million bucks, my math looks like this: SFR: $1,000,000 / 27.5 yrs = $36,363.63APT: $1,000,000 / 39 yrs = $25,641.02Difference: $10,722.61 Assuming the 25% tax bracket:$10,722,61 * 25% = $2,680.65 That's over $2,500 in additional cash generated from the favorable treatment of SFR's in the tax code each year.

That contract does not guarantee payment.I do agree with your premise that this seems to be a sweet deal for the unions, at the taxpayer's expense.Unfair treatment is the order of the day.

http://dealbook.blogs.nytimes.com/2009/05/14/credit-suisse-dressed-down-over-yellowstone-loan/If Chrysler’s secured creditors think they are getting rough treatment in bankruptcy court, they should consider what just happened to Credit Suisse in Montana.In a ruling that crackles with outrage, the judge overseeing the bankruptcy of the Yellowstone Club, a mountain retreat for the super-rich, took the rare step of lowering the priority of Credit Suisse’s secured debt, putting it behind even the claims of Yellowstone’s unsecured creditors, like vendors.

Your goal shouldn't be deal 1 but deal 2-20.Once you establish yourself with a HML and you have a relationship you can generally get better treatment - meaning if you put up 50% on deal one you might only have to put up 40% on deal 2 and so on....if you have the cash I wouldn't be shy about putting it into the deal to create a long term win-win - that is always my goal.