Select the right legal entity for my RE business

[Liz Pineda]

I want to make sure that I select the right legal entity for my business. I know that for active ordinary income (example: flips) I should do an LLC taxed as an S corp and for passive income (example: rentals) I should do an LLC taxed as a Partnership. I also know that for Asset Protection I should have an LLC for each property I own.

My business will be focused entirely in selling properties as lease options and land contracts (installment sales). With that said, I would like confirmation that lease options could be considered active income because it is technically short term, thus lease option properties should be part of my LLC taxed as an S corp. Land contracts on the other hand could be considered passive income because they are long term, thus land contract properties should be part of my LLC taxed as a Partnership.

I'm not sure if this is correct or if there is a better strategy to report income and losses for Lease Option and Land Contracts properties.

Suggestions very much appreciated.

Thanks in advance!

Liz