Even if you create a non-CA LLC, if you are managing the business from California, you will be deemed to be "doing business" in California and therefore subject to CA taxes.

. -- 100% of it flows through to Line 17 of your 1040 as income as soon as your S-Corp earns it.The decision on how much to pay yourself only serves to determine how much of the income you pay self-employment taxes on and how much is a distribution not subject to self-employment taxes.  

@Stefan StankovicHi Stefan I'm not going to be the best to weigh in on this but I'll try.My limited experience with going through various application meetings and looking into applying for variances is that it is often a different mindset, temperament, and patience level in dealing with these types of projects (and committees) as compared with the norm to be successful as a real estate investor.I have not built subject to historical area requirements however have talked with a couple people that have. 

Self-directed IRA A Solo 401k has several advantages as compared to a Self-Directed IRA including the following which specifically apply to your situation: Unlike a Self-directed IRA, you can have the account for the Solo 401k at a bank or brokerage that does not charge maintenance fees and where you will have checkbook control.Unlike a Self-directed IRA, if you use leverage (which must be non-recourse financing in either case) to acquire real estate with your Solo 401k the income will not be subject to Unrelated Debt Finance Income taxGeneral Considerations Re Investing Retirement Funds in Real Estate:1.

Formerly, upto 6 units owner occupied were not subject to rent control pre-2017 and upto 4 units owner occupied starting 2017. 

They don't really want to move, and we'd like to keep this house in the family.Can I buy their house for the exact remaining balance of the mortgage using a "subject to" sale AND they remain in the property?

I'd look at population growth, economic drivers, diversity of employment, landlord friendliness, etc. 

Each lawyer will likely have one they prefer and recommend which is why it'll be beneficial to hear more than one take on that subject.

I don't want to get off subject, but I'm looking to do the same thing that @Keleisha Carter is doing.

Pull legit comps for your subject, being able to calculate rehab costs effectively, and determining the ROI for your buyer.