It also allows you to manage paperwork and document communications with Tenants. 

Fake income documents are easily purchased online, and inexperienced screeners often miss red flags.

For long-term planning, consider transferring the property into a trust to manage tax and legal complexities.This post does not create a CPA-Client relationship.

As long as we would be legally allowed to proceed with this plan, then the question remains, as you point out, what is the tax burden for the partial 1031 exchange.

CoghillWe’ve used AppFolio for many years to manage a large portfolio, and while onboarding can be thorough, it’s primarily to ensure compliance with financial and legal standards.

LLC-A deducts the 10% management fee, while LLC-B reports it as active income, subject to self-employment tax but eligible for tax-efficient salary and distribution strategies.Ensure the setup has a clear business purpose, reasonable compensation, and documented management services to avoid IRS scrutiny.

Additionally, tenant issues and legal complexities around eviction can make management more difficult.

As for the legalities of setting up an LLC to protect you and your partners, I would consult with an attorney for best judgement. 

After a grace period of 1.5 days give another notice and mention legal action or law enforcement5.

Additionally, regarding the legal structure, an LLC seems to be the most suitable option for our situation.