That way, should a liability issue arise, the most you should lose would only be the properties / equity in that one LLC.Your S-Corp should be the owner of the LLCs along with a revocable trust which replaces you as an individual - your entities should be owned by each other, not any human person.Your S-Corp can then pay you using the "salary / dividend split", usually a 1:2 ratio such that one third of your compensation is subject to payroll deductions / taxes and the remaining 2/3rds is taxed as ordinary income (no SUTA, FUTA, FICA, workman's comp., etc.).Your tax attorney should be able to explain it.

Is the property less ordinary, e.g. very large, or high end?

Applicant agrees a cancellation of the rental agreement based on the neighborhood, floor plan, ordinary wear-and-tear, or other personal preferences shall be treated as a violation of the lease and grounds for complete forfeiture of the security deposit.

They need tax benefits and depreciation more than more ordinary income.For me, buy and holding in my backyard for long-term wealth and residual income was the way to go.  

I also realize that I will pay a penalty and I will pay ordinary income tax on the money. 

A decision to accelerate an expense or to defer an item of income to reduce taxable income for regular tax purposes may not save taxes if the taxpayer is subject to the AMTCapital Gain planning:Since short-term capital gains are taxed at the ordinary rate.

Active businesses (which real estate professionals fall into, at least based on my understanding) would have 30% of their business income taxed at a 25% rate (under the safe harbor) and the remaining 70% will be taxed at the ordinary income rate.

Mortgage brokering does not generate real estate rental income, but rather ordinary business income.

As I begin my real estate investing journey to be able to generate passive income for the day that i want to slow down/step back, I realize the same thing that you mentioned about having to pay tax on real estate income at ordinary rates right now if I don’t show with enough “stuff” to offset that income.

@Mathew Zorn,There are various stuff that you can deduct.Rather than giving you the list, first, let me say that you can deduct expenses that meet these two criterions: Ordinary Course of BusinessNecessary in the course of businessHere is the list some of the items:1) Mileage: any mileage that is associated with the rental activity.