I ask you to consider this because imany first time buyers choose locations where the properties will not have a positive cash flow while they are residing in the property & the goal is just to reduce thei living expenses (i.e. have rent cover a portion of mortgage payments.) 

Spending $50K over budget upfront could break the BRRRR math.If leaving $50K in the deal significantly reduces your cash-out refi or increases your payback period, that defeats the BRRRR strategy.

An S-corp on top can make sense for active income (flips, wholesaling, property management), but it doesn’t usually reduce tax on pure rental income and can add payroll and multi-state filing complexity.With multiple states (NC/SC/GA/FL), you’ll also want to factor in state filing and nexus before stacking entities.You’re smart to think about protecting assets and your 22% bracket, but I’d model a simple version first (just LLCs + your current return) and only layer in an S-corp if the numbers and activity level really justify it.

Wouldn’t house hacking reduce returns for a passive investor or lender?

"Close to 85,000 U.S. sellers took their homes off the market in September, up 28% from September 2024 and the highest level for that month in eight years," and the Senior Economist was quoted in saying,  “When tens of thousands of homeowners pull their homes off the market rather than accept a low offer, it effectively reduces the supply of homes that are actually available for buyers.

For one, using an LLC correctly reduces the likelihood that your personal name appears on a docket.

This reduces your payout based on percentage coverage carried and full replacement cost.  

It has reduced calls to100%.

Reducing risk?

A CPA might look at doing a cost segregation to accelerate depreciation, an installment sale to spread the gains over time, or structuring the sale as an asset versus stock sale to reduce taxes.