Although a barebones or weak Operating Agreement might not cause too many problems with an ordinary LLC, that would be tantamount to suicide with a Series LLC.

Hi Marilyn--A 2.5% Lender fee isn't out of the ordinary, but should either be paid at Closing or financed into the loan amount. 

Any expense that is Ordinary or necessary is deductible.Keep in mind the devil is in the details.

I’ve seen brand new patios slope back towards the house, joist hangers attached with deck screws instead of nails, brand new roofs that leak, etc. there are a ton of hack builders out there creating problems for whoever buys the houses they build that’s why it’s recommended to hire an independent 3rd party home inspector even for new construction.

Bathrooms and kitchen were in rough shape and we had to replace the cabinets in the kitchen.Back patio was a failed attempt at something, not sure what though.Everything else was pretty standard.What was done:Painted house inside and out.Replaced flooring with new laminate, tile and carpet.

Profit distribution in excess of your wages are still taxed as ordinary income but escape self employment tax, which is 15.3% on top of income tax.For example, let's say the profit from a flip is $100k and you draw $60k salary.

One just need read the law for a very easy understandingThe preceding sentence shall not apply to any foreign taxes described in subsection (a)(3) or to any taxes described in paragraph (1) and (2) of subsection (a) which are paid or accrued in carrying on a trade or business or an activity described in section 212.And then the reference from the above law to IRS Code 212(1) It has been paid or incurred by the taxpayer during the taxable year (i) for the production or collection of income which, if and when realized, will be required to be included in income for Federal income tax purposes, or (ii) for the management, conservation, or maintenance of property held for the production of such income, or (iii) in connection with the determination, collection, or refund of any tax; and(2) It is an ordinary and necessary expense for any of the purposes stated in subparagraph (1) of this paragraph.And for even simplified version, just look at the IRS guidance on the subject...What Deductions Can I Take as an Owner of Rental Property?

I really want to turn that active/ordinary rarned income into passive income as soon as I get credit and learn more about rental properties, leases, etc..

Tax it at ordinary income tax rates, that is fair, as after all, the contribution was tax deferred, but to then take an additional 10% is unfair.

And when you sell this one after 24 months all the profit will be tax free instead of having to pay ordinary income tax plus self employment on the sale.