Your lot is ~700 sqft so I would look into getting a zoning variance to alleviate the setbacks and maximize.

This seems rather drastic but could it be used as a way to alleviate potential liabilities from everything that could go wrong?

That is some very powerful leverage with you doing some muscle to get the engine running instead of buying the deal.Yes 40-50% is a wise suggestion.

We'll be repaving the driveway and adding additional parking area, alleviating one of the pain-points for the tenants.

You can’t choose to sell an interest in a DST like you can choose to sell a direct owned NNN Walgreens.The usual order of operations for my clients is:1) Choose when to sell and how much to sell for2) Engage in a 1031 Exchange and purchase a DST interestThis can help alleviate some of the stress of finding the right NNN replacement property you want to buy and then being forced to sell in a time crunch. 

So off-market you could alleviate the 1-month realtor fee, but in NJ it's all paid by the renter so there is no reason for a landlord not to use an agent to vet clients and do the background.

If you're missing any one of those, you have to figure out a strategy that alleviates that shortcoming.

Placing it on the tenant alleviates a task.Calculating Splits:  You will constantly calculate the fair splits.How many units is this property? 

Hoping economies of scale can help alleviate the cost a bit, so $2500 for 10 doesn't seem bad.

They mention that there are things to alleviate double taxation but sometimes those points can be complex.