Reducing from a 5 unit “Commercial” to a 4 unit.

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 We own a 5 unit ‘commercial’ apartment building.  we have recently moved into it after owning it for the past two years. Now that we are here, we are considering “drying up” one of the units to make it a 4 unit with us in one of them. 

 If we did this, we would be able to refinance it with a private mortgage instead of a seller financing deal that we have at 7%.  

My question is, would we have to take it out of the LLC in order to show that it is a personal residence to get the tax advantage in two years when we want to sell it?

 The extra apartment I would consider a master suite, it’s on the third level of the home with separate entrances. And I could Airbnb it? 

 It’s a 100-year-old structure in need of some plumbing and electrical repairs, which I am capable of. But we feel in 2 to 5 years we would want to sell it and get into something different, newer. And obviously, if it was a four unit building, we would be able to take advantage of the tax free sale. 

 So we are looking for advice  on The advantages and drawbacks of going from a 5 to 4 unit. As well as how complicated that process might become. 

The 5th unit brings in $500/ mo. So I feel an Airbnb would easily cover that, not to mention the major tax advantage after the 2 yrs.