Urban Lot Splits (ULS) allow you to divide a lot into 2 parcels, and Multi-Dwelling Unit Developments (MDUD) are allowed up to 2 units per lot.

The downpayment and closing costs would be one large hurdle in order to repeat this, I'm not sure how willing lenders are to allow 3 properties a year.

In real terms you would walk away from an investment long before a primary residence and therefore most banks will not allow it for anything less than 10%.

This will allow you to mitigate risk on the first property but also allow you to do a cash out refi on the second, so now you have access to tax free cash that you can do with whatever you please.

Simply gifting him half the property now wouldn’t immediately allow him to claim the exclusion without fulfilling this residency requirement, I don't believe.One thought would be to use a HELOC to pull just enough equity out of the current home and use it to buy a smaller home, or at least the down payment.

If I have rezoning then maybe that allows me some flexibility if ADU program does come in.  

Kyle,Before you do this call your lender or who ever is serviing the mortgage and find out if they allow a transition into an LLC or if they have a "Due on Sale Clause". 

The seller said that he had a court date that would clear up all the issues and allow him to move forward with closing. 

In Denver metro area, for instance, the city of Denver only allows short-term rentals in a primary residence.

Quote from @An Lan: Hi FeliciaThank you very much for sharingWhat is the maximum unit size allowed under SB-9?