Some munis will treat short term rentals as hotels and regulate and tax as such.  

Yes, someday I’ll have to pay ordinary income tax as I take distribution's but who cares if it’s all rental income and or appreciation (with no capital gains).

I don't think you can say liberal = high property tax because my property tax, as a % is way higher in Houston TX than it is on my home in San Diego, CA.That said, I wouldn't invest in blue areas because for me, I just can't stomach the tenant friendly rules and I'd be scared to death of some type of 'wealth tax' or change in overall tax rate or rent controls.   

However, there might be some tax benefit in your situation to treat this as a partnership (LLC tax as a partnership ).For instance, this treatment could reduce a married couple's SE tax bill when one spouse has wage income above the Social Security tax ceiling ($128,700 for 2018).

This means that the owners pay tax as though they earned the income directly themselves.  

If you need 50k *now* (well, 30k-ish after tax), a flip looks very attractive.

The ever increasing property tax as well as home owner's insurance premium, and the stagnant rent, is not good for cashflow. 

If your property is legally allowed as an STR, then it's just a simple form to get the permit and pay the taxes (not only General Excise Tax as mentioned above but also Transient Accommodation Taxes for both the county and state).The second is a bit trickier and that's making sure that the property is legally allowed as an STR.

Account ClosedThe Solo 401k is exempt from UDFI (unrelated debt financed income) tax, a type of UBIT that does apply to IRAs, but not the 401k on debt leveraged real estate.

If you rent out your current home and don't sell within 3 years, you lose the homeowner exemption on capital gains tax.