You will be skewered by the press and the lawsuits alone will eat up all of your time.

She offered $10K on top to have it completed in time and saved a lawsuit or two. $10K may sound a lot but that home increased value by 1.5M more so it is an investment.

It could open you up to a lawsuit or coercion (if you don't rent to me...)        

Hey there- my husband/business partner, @James Carlson, and I work with a lot of clients that are interested in ADUs and finding mother in law suites (basement, attic, garage or other) for an investment property.

Hi,is it common to set up LLC for income property in CA to protect from lawsuit despite $800/yr tax?

It seems there is a ton of differing opinions on which course is best for protecting yourself from potential lawsuits.

I reached out to them and received what is by far the lowest price back on the quote, but after reading a couple threads here about the claims process seeming to require lawsuits to get anywhere I am more worried about it. 

Besides this lawsuit this person is no longer tied to the property...it's back in the hands of the estate partners. 

Bankruptcy would be the only thing that could stall the sale outside of a full payoff or a lawsuit that you have to pay for, if you can't find someone to take your case on a contingency basis (If I were an attorney, I wouldn't take it based on what you wrote) and it would only stall the sale if you don't have a case.

@Stephen Karakitsios welcome and way to be proactive about your first deal.Keep in mind, the idea of an LLC is to protect assets in the case of a lawsuit.