As I always say when it comes to taxes, if I pay more taxes, it generally means I get more income and higher capital gains so I'm fine with that.

You should have a tax person explain to you how the stepped-up basis may help your beneficiary.

@Andrew Freed, You don't have any issues from a tax perspective with bringing passive and active income under the same entity? 

Here’s a quick checklist to cover your bases:Property Condition: Get a thorough inspection to assess major items like the roof, foundation, and HVAC—this helps you plan for any big repairs.Financials: Account for all costs, including taxes, insurance, maintenance, and property management fees if applicable.

Pre-tax and Roth built in. 

It’s looking like this will cash flow neg just with est mortgage payments plus insurance and taxes of $1100ish (after renovation), property management of $120. 

We do quite a lot of small-mid size multifamily in Reno which has somewhat similar dynamics to Sac, but with some key differences in terms of property taxes, landlord laws, etc. 

I want to use her equity as a gift for the down payment to avoid capital gain taxes.

Then right before closing, they ran the county records and said they can’t do a HELOC on a home I don’t personally own, and I would need to do a quit claim deed and put it back in my name to get the loan approved and then can do another quit claim deed to put it back under the LLC that it’s currently operating under. 

The short answer is take them to small claims court.