There are legitimate reasons to structure this way, but every dollar you pay yourself as property manager is subject to 15.3% self-employment tax  if you are turning around and reducing your S Corp income so that you minimize SE taxes, you should have just left it as passive income to begin with   What was your goal here?

I am a active Realtor (and Investor) in the SE Florida south tri-county area (Miami-Dade, Broward and Palm Beach Counties). 

Look at it this way, there are many sidewinder bankers, just a crooked in their dealings and the FDIC regulates them, much can go unchecked, so you need to do your due diligence, check with other borrowers, look at how many foreclosures they have done, se what their lending activity is before you judge a foreclosure rate, ask others in RE, check the integrity of the person and the company.

@Kimberly H. while I haven't had your situation per se this is my approach.

My experience in SE Michigan (Detroit suburbs) over 5 years was terrible.

There are properties in SE Livonia for less than 50k.

When I hear "active business", I assume this means that I need to pay SE taxes on earnings, can't depreciate, gains/losses are ordinary income, etc.

Nobody really "put him in charge" per se, but the PM didn't go out in person either.

Also your rental income would likely be treated as passive therefore not subject to SE tax.

I'm wondering if/why I will have to pay SE tax and all the other extra taxes on my profits from flipping.This would make sense to me if flipping were my job and I were self employed, but the majority of my income (and my hours spent working) come from my day job.I know I can set up a S Corp and pay myself a "modest" salary, but I'm wondering if I could do so without the modest salary (since I already have a salary from the day job) and just take all of the profits as dividends/distributions.Any thoughts on how best to approach this in order to minimize my tax requirement would be very appreciated!