50/payroll run is not that expensive.

Should I set up payroll and pay myself?

An S corporation allows you to avoid self employment tax by paying a reasonable salary instead (since salary is through payroll and incurs those taxes).

We are also able to share payroll and personnel.

In addition, my competition is less sophisticated, my ability to build equity is strong and my exit options are many (seller-fi, seller-fi direct to note season and sell, sell to retail buyers, seller-fi to another investor, lease option, sell as a performing asset to another investor, get lucky and sell the whole portfolio above market to a hedge fund that's one a buying mandate (lol), etc)I think the cashflow achieved is very strong, considering I left very little cash in the deal (none, really, considering the refis where I pulled out 30-40k+ more than I put in, eg Property #1 & #5).  

The guy to the north seems quite a bit more sophisticated and has already expressed an interest in assembling our lots.  

As far as I'm aware, you're protected from personal liability with an LLC so long as you A) don't make any personal guarantees (or violate a law which specifically creates liability for the owner, like a failure to make payroll tax payments) and B) keep the business separate from your personal finances and activities so that there's no opportunity to pierce the corporate veil.What do you mean by "pass-through liability" here?

Payroll, bookkeeping, etc can mostly be done remotely.Here is a great list of questions to ask a potential accountant:http://www.biggerpockets.com/forums/51/topics/70447-questions-to-ask-a-cpaAlso check out the www.NAEA.org page in your search.

He is a sophisticated investor indeed who does many deals on his own.

I would like to do payroll as easy and quickly as possible.