Entity riddle

[Josh P.]

Here's my situation, brief as I possibly can state it:

In 2009 I bought my first rental property, a duplex.

I then converted it into a triplex, eventually converting all 3 units to corporate rentals to fill a hole in the local market. As of 4/9/2012, the business is still a sole proprietorship.

I have two 4 unit apartment buildings under contract now with plans to close on both prior to May 30th, 2012.

My brother has been doing a great job managing the property and will also do a great job managing the new properties when they close, and for what its worth he finishes his real estate license next month (I can make no such claim, yet :-)

I would like to form a parent company, an s-corp for ordinary income activities like fix and flip. I would also like to place all three properties into separate LLC's.

Is this the right strategy, as opposed t bringing family on directly? And should my brother form his own S-corp since he will probably be doing his own independent buy and hold and fix and flip deals.