Yes it's a huge problem.You should fix this correctly now.Open the walls and put in proper sound reducing insulation.

We’ve started talking about the potential for collaboration, particularly to reduce construction costs by building simultaneously.

To avoid reducing your lifetime exemption, you could gift equity incrementally, but this requires proper legal structuring (e.g., fractional ownership transfers).

A 1031 exchange doesn’t apply, but funding through a self-directed IRA can defer taxes, though profits from debt financing may trigger UBIT.To reduce taxes, consider forming an LLC for better expense deductions, offsetting gains with investment losses, or holding the property for 12+ months to qualify for lower long-term capital gains rates.This post does not create a CPA-Client relationship.

If I were to reduce or take out the vacancy, the 2 would cashflow.

Of course, that could be offset as he works to reduce inflation.

(eg, if your lot is not the standard 25 x 125, but some other multiple where the width is actually skinnier than 25, and the lenghth is longer than 125, and you want to reduce side setback requirements, eg.) 

If the market is tough, I reduce the rent rate over the full 12-month term.

85LTV ask on a LTR rental is a tough ask, when adding an STR factor, nearly every lender will reduce max leverage by 5%. 

Learnt lesson not to fully depend on property manager and should have made decision faster by reducing rent .