I know very little about legal precedent but I'd expect the major meter manufactures (selling into the utility space) to be well incentived to challenge these items best they can, and they have money.Here are the issues, and the reasons that the difference between an air forced system and a boiler/hydronic system are not meaningful for this discussion (ie efficacy issues of sub metering exist for either when method of measurement is measuring heat at point of delivery):In either case, the blower (or pump for a boiler) is the method of 'moving' either air (central air) or water/glycol or equivalent (boiler etc). 

Days wind down and now they have a (knee jerk) reaction and buy something non-optimal for a property just to avoid tax penalties.Had they been realistic starting out they would have had time to locate quality properties to buy instead of looking for a Unicorn.

Most LLCs are set up for liability protection or similar non-tax reasons, and especially in CA, the penalties for "non authorized" practice of law are steep that a lot of CPAs will not even form the LLC for their clients. 

Maybe better to buy for rental in non-HOA neighborhood.

Consider creative approaches like short-term rentals, ADUs, or co-living spaces that maximize income in limited spaces.

One thing to watch out for is the financing aspect of it - could be a hurdle getting a loan if the transaction is "non-arms length" - i.e. between "Friends" - might be worth looking at seller financing too

In both cases we did 30 day non-renewals.

As far as the size I think it would depend on the space. 

I.e, you used them for non CapEx/vacancy reasons.

I know many real estate cons who swindled millions from people and not only have they avoided jail but avoided everything. they get a judgment against them that they just ignore and move assets to someone else as an accomplice.