Additionally, confirm the transfer won’t lead to property reassessment, which could increase taxes.

I’d recommend a consultation with an attorney specializing in these, in addition to an accountant.

If they’re underfunded, you could get hit with special assessments.Not sure about the exact contract with the tenants, but I assume if there is any additional assessment, it would be tenants’ responsibility.Since you want to stay local and focus on cash flow, commercial makes sense, but have you considered industrial or flex space? 

However, just because I don't agree with it doesn't mean I am in favor of the Government being given additional power to enforce additional laws and restrictions that infringe upon our freedom.

Use a home equity loan (fixed debt) instead of a HELOC (variable equity) and build an additional unit you can rent out in your own backyard.

Quote from @Nick Am: @Michael Plaks--> The SE taxes are STRICTLY NOT in addition. 

Are there any additional considerations?

If you have any additional advice please let me know!

Additionally, please share if this was a scam or not.

The only time we need additional information is if they are denied.Once accepted, we tell them exactly what we need from them to move in.