This ensures you’re protected in case of an audit or any legal questions.4.Consult a Real Estate Attorney•This step is critical!

Worth using, but also worth dedicating some time to qualify the right one to work with (I work with a Bigger Pockets preferred lender, so I am not impartial!)

Don't want to pay tax on selling the rentals I unfortunately don't think they actually want to utilize the 121 to sell their existing primary and then potentially buy another one-it sounds like the goal is to ultimately continue owing that initial home which I think makes this whole plan 5x more likely to be torn apart under audit because they're trying to end up with the same property they started with.  

This is a very important log but only to be used if asked (i.e. if audited).  

First question I always ask is who audits your financials and who does your books and send me what your reporting looks like.

In addition to taking 6-9 months to close, they are also subject to (i) annual audits, (ii) annual REAC property inspections, (iii) recurring annual MIP payments on top of your interest rate, (iv) large initial deposits to the replacement reserve, (v) commercial space limitations to 15-20% EGI / 25% NRA, and (vi) less forgiving underwriting with 7.00% minimum vacancy rates when determining our underwritten NOI.

Perhaps seek out and audit GPs and their private offerings and invest with them as an LP.

It is done with a simple click by the teller or by a processor later.Each one of those reported transactions makes it more likely the person will be audited by the IRS. 

with our old system there was a great audit trail, message history and ability to BCC our support email so LeadSimple could keep a history of all communications.    

Quote from @Gregory Wilson: A few things there, Brendan.First, an LLC with you as a member and your (wife, son, pal, etc.) partner as a 1% member will file a Form 1065 which is about one tenth as likely to be audited by the IRS as a Form 1040 with a Schedule E rental activity (which I presume you will attempt to show is an active business).Second, you want an LLC because when your local Alabama handyman drives his girlfriend's uninsured truck into a van load of U of A medical school interns on I-22 when he goes  to get some shingles for your roof, on your business, you don't lose everything you have or ever will have to an uninsured claim.