Your post neither provides valuable or additional information nor did you post direct questions like the rest of us do.    

Latest update is distributions have paused and they are now raising additional capital. 

Additionally, I expect applicants to follow instructions in the advertisement and application, to make and keep appointments, to show up on time for appointments, dress and behave appropriately at appointments, and in general demonstrate throughout the process that they are someone that is easy and pleasant to do business with.

Additionally, do you have any other ideas or strategies that might help achieve his goals without incurring a tax liability?

Happy to answer any additional questions. 

Additionally, you want to start building your "Core 4": agent, GC, lender, and PM. 

Either way it would be a grey area, selling a house with a different amount of units/bedroom/bathroom seems extreme though. its an auction site, I have seen auction sites miss the fact there was additional lots in a sale.

You might need legal advice to ensure this process goes as smoothly as possible.

In hindsight I probably should have gotten an additional HVAC-specific inspection and tested the measurements for the actual washer/dryer space.

Your primary strategy should be to have the Contractor and all Subcontractors add you to their insurance policy as Additional Insured.