A refinance into an LLC avoids this risk but typically requires a commercial loan with higher rates and stricter terms.If asset protection is the main goal, umbrella insurance may suffice without disrupting financing.

To avoid Prohibited Transactions, SDIRA investments really need to be passive.Oh, I'll also mention that SDIRAs are subject to UBIT tax.  

The LLC aspect is more for liability reasons if someone was going to sue you (so maybe you create the LLC when your son moves out).2) Like #1, a separate bank account will make it easier to track, but it's not required3) No, he can't also be the property manager.

Investors aren’t avoiding the work, they’re just focusing on higher returns and leveraging their experience.That said, even the high-level investors we work with still BRRRR single-family homes, they’ve just added larger deals into the mix.

-Transfer the property into an LLC – This may allow me to take ownership while potentially avoiding property tax reassessment, however this sounds like an involved process-Establish a living trust for my aunt and mother – The trust would specify that I inherit the property upon their passing and provide step up in cost basis but i'm worried that the living trust can be modified to have me removed (who knows what can happen) - My mother is somewhat volatile.I would like to live in the property and my mother will live in her second property with her husband. 

I am very interested in avoiding cap gains and recapture. 

Depending on how close I was to having 20% equity in the property and being able to avoid PMI, I’d consider using some of my cash to pay down the mortgage when I refinanced.

Thank you I’ll probably do 5% down so I can avoid the PMI.     

His crony Hatti Day is the “real estate manager” of the property and actively avoids addressing any of the lies she makes related to the unit.

Refinance is one way to do it, if you want to avoid getting new debt because cash flow is high look into lease options to buy or executory contracts.