From reading more on this, it would seem to be ordinary business income, I'm just wondering if there are any other complications to our LLC just being added to the deed, vs. buying outright?

Is it capital gains, ordinary income or both?  

@Sendhil Krishnan @Dave Foster  Dave I have seen this many times over the last 30 years.unless they thought this threw up front I suspect this is inventory and they are in the business of creating lots to sell to builders and subject to ordinary income and the managing members are privileged to pay SET as well.I would think like you said the only out for him is to sell his % to someone one time and exit.Many times when I buy plats this is the case.. the seller won't record the platt for tax reasons IE they don't want to create inventory and by recording the platt boom its inventory..

I've had pretty good luck finding contractors there when I need something out of the ordinary.

The unrecaptured depreciation is taxed at your ordinary income tax rate up to a maximum of 25%.

If the seller accepts the offer one of the things on my list to figure out is if the screened in back patio and backyard shed/1 car garage (that is built only 1-2 feet away from the neighboring fence-line is permitted or not.

If the option expires the fee is treated as ordinary income in the year of expiration. 

A transaction under $10k can't be an ordinary transaction.I guess it's either some sort of transfer between family members (doesn't have to be non-legit).At tax auctions it is possible to find properties with minimum bids as low as a few thousands but usually these will be redeemed before the auction or will be going up in price during the bid process.If you make a more thorough research you can find out through the public records how the transaction was made and with what sort of financing.

Frame it differently so it happens more organically as part of your lifestyle and the ordinary course of events....For example, you can stick toe in the real estate pool without getting too wet like this..Do you have home yet?

The first thing that screams out at me is that at the very minimum he would be deferring capital gains by trading that for ordinary income tax.