Right now however, there are some tax advantages to an S corp for a business with earned income.

It's probably only a matter of time before things get much more serious and I can't imagine you would enjoy your hard-earned reputation being commingled with his.

Around here if a contractors works too hard, he will lose his MassHealth (free/reduced health insurance).

All of those skills can eventually help earn money, while giving Ryan Reese the flexibility to work around his school schedule, and be invaluable in his future Real Estate career!

And, if the properties are truly profitable, I want to roll the accumulated earnings into more properties.I self manage, and I'm willing, for now, to put in my labor for free.

There may be other comps that support a higher value, but something is reducing the value of this one.

He doesn't always use his own money, so yes he benefits from the form his 5 points, and then the actual investor whom gives him the cash wants to see his money earning interest, preferably for more than 2-4 months, hence to make it worth while for his investor to lend for such a short term he sees it necessary to up the rate.

Also, anything we can do about reducing our 2012 tax bill?

The income you’ll be generating on flips is going to most likely be considered earned, not passive.

Somehow, if you have replacement coverage, and chose to NOT rebuild, the insurance company can give you a reduced payment (I heard 80 or 90%) of the loss.