True, converting a personal Schedule E to a partnership will indeed reduce your IRS audit chances, statistically speaking.

That is "true"....Here is the bottom line, and I am going to skip over the entire foreclosure process unless someone specifically asks. 

Monthly payment is 1900 with a 6.5 rate and would rent for 2500.posted in another group but realized it was the wrong one Keith, as long as your true intentions are actually to rent it out and you get a signed lease this 100% can be a DSCR.

So as long as someone gets realistic with the TRUE cost to  own and maintain and the numbers work it can work but I am a big proponent if your going to have these types of assets they need to be paid for to really enjoy any financial benefit.lastly I can say the same thing about new builds.. over the long haul unless there is REAL appreciation more than just 2 or 3% if you sell within say 10 years your going to be lucky to break even as your going to have to spend 20 to 30k making the houses fresh again to get top dollar a 10 year old rental is not going to bring top dollar and the value at that point will only be what an investors will pay for a given cash flow..

It is true that you are able to find deals in every market, but one of the things I have learned is that finding the best markets to invest in is better that trying to make deals work in a bad market just because it is close to home.To answer your other questions. 

I came across an RE opportunity that seems too good to be true but number works.

For LLCs, it’s true that many investors start without one, but with significant assets and your husband’s profession, asset protection is definitely worth considering.

However, this has to be the primary residence of everyone on title in order to qualify and even if that were all true, we're still only up to $1M that way.I agree with the other commenters, the parents should continue to own it and live in it as their primary, leave it to the daughter when they pass, and she inherits it at the stepped up cost basis. 

Thanks for your insight, I didn't realize that's what it was- I wasn't 100% sure of the method, and knew it was in the "too good to be true" category, but that's a whole different presentation there of what this method really is.

Figuring out the true cost will heavily depend on the type of dig down, depth, and total square footage.