What I would do is try both and separate the leads from each and see which one is better.

What is the best way that you have found to tell them that you need labor & materials separate, so at tax time you can send them a 1099 for labor?

It separates your personal assets from your business, providing a safeguard if any legal issues arise related to tenants or the property.

I have so many questions though.1) Can anyone tell me more about series LLC and whether it's necessary to hold each property in a separate LLC2) What are your thoughts on a trust, rather than an LLC - advantages, disadvantages etc?

I would suggest doing these separately however since you will run into issues with a partial release clause on a blanket loan.

Utilities are OFTEN overlooked so reach out to power, telecom, gas (or go all electric), water, and sewer to make sure you understand what it would take to get separately metered services from the primary house.

Another idea could be to see if the HVAC system can be adjusted or modified to better separate the airflow between the units.

I have a separate short term rental insurance policy (insurance agent recommended short term policy over long term since it's ultimately being used as a short term rental) Curious if that is the same as the Airbnb $1M liability insurance or if they have a separate one

However, could she gift half the property to the son who lives with her, which would allow them each to use their own separate $250k capital gain exclusion? 

I just used my attorney as our registered agent, PO Box as our business address, and a separate LLC as the holding company. $50/ LLC and it literally takes less than 20 minutes for each LLC and costs less than $20/ yr. to renew each LLC.