I would do 1 as once  I use it and then pay back I can get better line of credit .Also it stays off the personal records

You will want to make sure that you record your depreciation schedules the correct way if you are self preparing.

Find someone with a solid track record of new construction builds. 

And to get their attention, you need a long track record and infrastructure, as well as the right deal(s).

2) Assuming I can proceed and put the home under an LLC of some sort, what would stop the tenant from just checking the county tax records and finding out who is listed as the last purchaser, and from there come after my family? 

We are under contract to sell it and supposed to close last week but the city will only issue a 2 DU cert because they "have no record of permits to convert the storefront into a residential coach house"We did a FOIA on the water records which came back with nothing, we are still waiting for the FOIA on the permit records but don't think it will give us anything because we talked to the seller from 1986 and he said the coach house was a storefront when they sold it. 

Then the another question pops out , why should I pay for the owners bad balance record keeping???

Understanding the requirements will streamline the inspection process and make it easier when the time comes.Remember to keep organized records of all communications and documents related to the program.

There was an issue with them and I am still waiting for that to resolve - but it’s in the works.The state where the relinquished property was, as of this writing, still has not recorded the deed - 2 months now after closing the county is dragging this out. 

It can also simplify record-keeping in case of an IRS audit.That said, you can technically pay property-related expenses from your personal account, but separating the accounts will help keep your finances more organized and clearer for both you and your CPA.