I think you could split after sale for a non-taxable event, the total basis transferred in would be split across the two "new" properties.Calling @Dave Foster to give his insights here, lots going on in this one.

It’s just 7 miles from the beach, 2 miles from a large new hospital and medical campus, and within 2 miles of the county government offices.

For you, it makes sense, so I would focus on getting people like you - home business that could use a smaller space to make it more open to the public.

I even named them the #3 non-seasonal market in the US today in our BiggerStays weekly newsletter here based on numerous metrics.

**Community Investment Program (CIP)**: Some local banks or financial institutions partner with government programs to provide low-interest loans or better lending terms for landlords who participate in affordable housing programs like Section 8.

What credit score do you think tenants qualifying for government assistance will have?

Even if you create a non-CA LLC, if you are managing the business from California, you will likely be deemed to be "doing business" in California and therefore likely subject to CA taxes.

I know RE Professionals get better benefits than non.

The likely market rent in this area is as low as $995 and probably no higher than $1195 and a lot of the rent will depend on condition of the property.Pull up public records on the home, and you will see it initially sold in 98 for roughly 50k. 

Start a public records inquiry at the local/county level.