Have any idea about Gift tax in NY?

So the question becomes based on their individual and personal tax situation what is the estimated tax burden they'd save? 

The government.

Selling may trigger capital gains tax, but if you lived there for two of the last five years, you may qualify for a Section 121 exclusion.

Tax-Free Exchanges: While 1031 exchanges aren't available to SDIRAs, the tax deferral within the account means you can sell property and reinvest proceeds into new opportunities without immediate tax consequences.

Will the title company put this property under our LLC name, and won’t be required to legally inform HUD/tax authorities. - will it influence property taxes once we move to conventional loan in 3 yrs? 

Often times you will pay much more in taxes than if you pulled the money out, paid the taxes and penalty and then started investing in real estate.For example, with the financing you mentioned, the IRA must pay taxes on the portion of the profit earned by financing. 

My payment with insurance & taxes is $1425 a month.

Utilized a low down payment loan, maxed seller credit, tax proration and closed on the 1st of the month to maximize my cash and acquire this property What was the outcome?

You will want to fully understand the tax reporting burden you will face.