. $35k will allow me to buy a house in the b- c+ neighborhoods.

Did you see that last section there, on item c?

I would validate the vacancy thru copies of his schedule c/e.

Yes property manager would be there, so -10% of the $925So I guess now I have 3 options; a) renovate both houses b) renovate house #2 c)Look for and buy hypothetical house #3.

If you select a 506(c) exemption it pretty much eliminates non-accredited money at this point, which is a huge downside to capital formation and is completely illogical based on how the old rules worked.  

It is in a C neighborhood/ blue collar in Indianapolis.Maybe a creative finance guru such as @Aaron Mazzrillo would be willing to lend his expert opinion?

@Elizabeth C.  

c=huf1?

Turnkey in a rehabbers mind might be different than that of others so it might have been close to turnkey but I dont blame you either b/c it wasnt.

Unless you're operating under a C-Corp, all net income will flow to your personal taxes (not just $100K), and if these are spec builds, all net income will generally be subject to some Social Security and Medicare taxes (self employment taxes).Next, let's tackle this:"Would it make sense to have the LLC file under an S-Corp in 2015 in preparation of selling 2 houses, pay myself 1/3 profit as salary, then the other 2/3s would stay in company/ and eventually be paid as dividends thus saving from self-employment tax/ Newere Obama Tax"Filing as an S-Corp won't allow you to defer salary/distributions or taxes.