Quote from @Danielle Levy: Lesson learned: provide the full story up front and you'll get better advice.If you feel there's a case, put together all the evidence.

As you move up the price chart there are just fewer and fewer renters. 

Just transferring it gives you zero protection - the reason why it never comes up is because no one can name ways you get sued when you have a good insurance policy so its a mute pointSo long story short, you are wasting money transferring it to a LLC is my personal non legal non tax opinion.

Anything you do remote will come at a cost of operational inefficiencies and a higher cost of doing business.

Check the forum for Events & Meetups and see if they have any in your area.

Are you saying that the IRS-1065 Is going to be pulled into an audit, or will just the disgruntled partners IRS-1040 be pulled in for the audit?

This would apply to your unit.Your biggest concern with setting the rent should be the near future. 1) Your insurance is guaranteed to go up, probably dramatically.  2) You may get an insurance assessment bill to cover the CA Fair Plan losses.

The basement is empty and we are looking to finish the space and turn it into another unit.

If you are looking to expand your knowledge I highly recommend the webinars BP offers. 

My brother is a musician and knows lots of people that come to town to visit.