For example, certain states like CA and MA have "claw-back" provisions, some states have withholding requirements, PA has some funky 1031 exchange laws, etc.Work with a rockstar QI (like @Dave Foster) and a real-estate-savvy tax professional to ensure you don't fall into any traps.

And even I just fell into the trap of just answering your question rather than trying to figure out something that fit. 

Probably false security, but I feel better knowing carbon monoxide or radon can't be as easily trapped in the houseHow much is the rent?

I tell everyone that the market is less important than the team you pick to run your operation.Buffalo is a great market if you are looking for a lower barrier to entry and higher cash on cash returns.I would advise you don't fall into the trap of chasing the cash on cash returns.  

@Daniel CruzOne thing I have learned from investing in section 506 house flip investments with regard to states is to be aware of states that are judicial foreclosure states versus non-judicial foreclosure states.  

@Manolo As I mentioned before an LLC filing as a partnership cannot own an S-Corp.As far as your other comments - rules and traps are in place to avoid abuse.

The designated responsible party must be available on-site to address any issues as soon as one (1) hour following notification from an occupant, a city official, a code compliance officer, or law enforcement officer.Prior to the city issuing a certificate of registration, the vacation rental is subject to inspection to ensure compliance with: (1) minimum safety requirements under section 34.5-12; (2) minimum information requirements under section 34.5-13; and (3) to confirm compliance with Chapter 34.5 generally as well as any other applicable provisions of the Sarasota City Code and Zoning Code.The minimum safety requirements are set forth in section 34.5-12 and include compliance with the Residential Swimming Pool Safety Act, operation of smoke and carbon monoxide detection systems, and installation of fire extinguishers.The minimum informational requirements are set forth in section 34.5-13 and include, among other things, providing: (1) the location of the nearest hospital; (2) the non-emergency police telephone number; (3) the dates and approximate times of trash and recycling pick up; (4) the street address of the vacation rental; (5) the name and phone number of the designated responsible party or parties; and (6) emergency evacuation instructions.

Its very easy for people to get caught in this trap."

Is it possible to get a hard money lender to acquire the properties then refi (there is a good bit of equity in these properties) and also what are some things I should take caution to  & other traps to avoid? 

The biggest problem was that the home was infested with insects and rodents.