In Pennsylvania, you must pay realty transfer tax. As

Are you projecting the income tax and self employment tax as part of your projections in each individual analysis or are you worrying about that at tax time and not projecting that in the net profit?

I'm confident enough in my skills that I'm cashing in my entire 401K (Roth AND pre-tax), as I will likely do MUCH better over the long run with real estate.

Unlike passive rental income, the income from an active trade or business is subject to self employment tax (a nasty 15% tax commonly referred to a "social security and medicare" by working folks).

Formula for ROEAnnual Cash Flow + Net Increase in Property’s EquityDivided byAccumulated Equity Prior to YearIncludes net sale proceeds after tax as if you were to sell at each years end.

Lets say his stock is worth 1 mil dollar.Then this brokerage is issuing him line of credit for him for low interest rate with margin, say 20%, so he got $200K with 2% interest rate.That's the way to avoid the tax, as long as you don't sell it and able to access it with low-interest rate, it's not taxable.has nothing to do with LLC,etc.

Try to reduce tax as much as possible.

For an  out-of-state LLC holding rental in that state, I know i will need to pay $800 franchise tax as CA resident, but do I have to foreign file in CA to register with secretary of the state in order to pay the $800 tax?

I'm filing my 2017 tax as married jointly.

This would only work on Federal tax, not FICA or California tax as the state does not participate, but it is still 37%, and may be more in the years to come.The strategy would be something like this:year 1: buy multifamily for ~$1M, cost segregate, deductyear 2: buy multifamily for ~$1M, cost segregate, deductyear 3: buy multifamily for ~$1M, cost segregate, deduct...stop at some point and enjoy having cash flow + $100k of cash savings a year due to reduced taxes.Spouse is onboard and would do most of the work buying these properties, and managing them if they are reasonably local.Exit strategy would be don’t exit.