I was chatting with some of my lending buddies at big banks and they are all backing away from the CRE space including office because operating costs are increasing more quickly than rents.

In my mind, the reason for doing this would be to have two engaged platforms versus one dominant one.

Most DSCR programs will want you to have owned the property for more than 6 months to allow you to use appraised value instead of cost.

However, this has to be the primary residence of everyone on title in order to qualify and even if that were all true, we're still only up to $1M that way.I agree with the other commenters, the parents should continue to own it and live in it as their primary, leave it to the daughter when they pass, and she inherits it at the stepped up cost basis. 

Can you give a cost breakdown?  

My accountant wants me to start doing this in the event of an audit being I’m starting larger projects and will be implementing cost segregation Thanks

For those that do invest in real estate using this, what are your reasons? 

However, it's a safe bet that these respective areas will continue to appreciate steadily for the reasons noted.

I like umbrella because there is no worry of being pierced for inadequate separation of finances, if sued you have a heavy weight in your corner who has all the consequences of a defeat, and because usually it is reasonably priced (mine today is not so reasonably priced but I believe it is mostly related to the risks of CA).I do understand that the probability of needing the umbrella policy is low.  

The mistake could be costly.