I was trying to get started, had all the information but needed to pull the trigger to get in the game. 

Very few people operate their LLC correctly and therfore this just gives them a flase sense of security.Moving into a LLC can also trigger the due on sale clause.

Selling would likely mean taking on new loans at much higher rates, reducing your cash flow margin unless the new properties are stellar performers.Transaction Costs and Taxes: Selling could trigger capital gains taxes (depending on exemptions) and other selling costs, eating into your net proceeds.

This is an example of private lending which is different than the IRA owning real estate and does not trigger UDFI/UBIT tax.

Don't over think this, pull the trigger actions create results. 

We're exploring creative ways to provide him with the cash needed for the down payment while avoiding triggering a taxable event.One strategy we're considering is purchasing his future primary residence ourselves, making the mortgage payments, and then, once we've built enough equity—comparable to the appraised value of his rental properties—transferring the title to him as a form of exchange.What are your thoughts on this approach?

@Matthew Forrest I just haven't pulled the trigger on making ADU development my priority business plan. 

Even when it wasn't anyone's primary residence there were still many potential dispute trigger points.

The boot amount is taxed as capital gains and may also trigger depreciation recapture.For example, if you sell a property for $500,000 with a $300,000 basis, resulting in $200,000 of gain, but reinvest only $400,000, the remaining $100,000 is taxable.

Easy things, but they trigger the algorithm.