We do tell clients about the shift in value over time, as the 1245 assets really do depreciate and the 1250 assets really do appreciate.

@Jerry ZhangYou can also put a lien on one of your assets for a short period of time.

Does this mean they're technically violating lending rules/regulations by not informing the lender that the property will be sourced as a rent-by-the-room asset? 

Do you understand that asset class and market?

I'm not certainly no expert on asset protection but I'm unsure of the downside of having them in an LLC.Regarding lawsuits, I will tell you that insurance/LLCs are probably both great for protection but are secondary to doing a good job with property management.

Capital gains tax applies when you sell an asset for more than its adjusted basis, not when you borrow against it.

This is a classic case of buying in an area you probably should not have and only appropriate for locals who will go to the property the moment tenant moves out remove all the mechanicals themselves and then re install upon tenant move inwhy anyone wants to own this type of asset is a mystery to me..

Read books like Set for Life by @Scott Trench and Start with Strategy by @Dave Meyer to get the mindset of starting on the table before going too deep into an asset class or something like flipping.

Regardless of the construction quality, that wont prevent double digit annual increases in your HOI.

This way, you hold onto an appreciating asset without a heavy upfront cash burden.