It sounds like your seller is definitely trying to commit fraud and potentially even tax evasion.

I have been given no confirmation only evasive answers which is really up to them and i'm fine with so decided to relocate because of our vacation and our home will not be ready for another 9-12 months. 

For some, incorporation is not just about limiting liabilities but also about determining how you prefer to be taxed and if possible, limiting your tax liability (not to be confused with tax evasion). 

If you try to pay taxes on your income from an illegal rental, they've got you there, and if you don't pay the taxes, then when they catch you they've got you for tax evasion as well.

In addition to that the HOA, down stairs neighbor are pointing fingers at me and the property manager is being evasive. 

That's tax evasion.

I'm not a CPA but I imagine you'll be prorated on the space and duration you occupy of the whole.Just answer all the Tax preparer questions truthfully and you'll pay just what you owe without worrying about tax evasion.

@Nick Crosby Pretty sure you would still have to register at least one of the LLC's in CA to avoid fraud/tax evasion charges. 

While I wouldn't necessarily volunteer that kind of information, I didn't want to be evasive and I wanted to help..

So I won't take the NNN deal at 6% and I keep looking for the evasive 8% cap rate deals with stable tenants and a 20 year lease.