They are usually triggered during an audit or if you change the insurance policy, that's why I usually recommend keeping the existing policy under the seller's name and adding your new policy on top. 

I also got to thinking that we should perhaps audit each of our units before each winter to see what components/tenants could be eligible which would have otherwise been major capex items. 

Rather than start out new books with a CPA, I'm hoping to hire an accountant for a financial audit going as far back as possible, to confirm the unfortunate workflow (expenses paid from various personal accounts, unreliable reimbursements from building accounts, etc). 

Under audit, the IRS may view your cash-out refinance as you taking cash at closing, which is also a taxable event.

The Buyer(s) & Seller(s) nor their Agent(s) listed below have any agreements (written or implied) that will allow the Seller(s) to remain in their property as renters or to regain ownership of said property after the successful execution of this short sale transaction.†HUD/FHA/VA, Fannie Mae, Freddie Mac & FDIC are now carefully auditing short sale transactions going forward and are also looking at past closed short sale settlements that may have been considered non-arm's length transactions.

If there was an audit by one of the GSEs they wouldn't see the entity owned the property either.

The IRS leaves everything up for interpretation, you would have to prove your not disqualified by an ERISA attorney letter which no attorney will sign off if audited Seems crazy but If it's a gray area probably not a good idea

We have had a handful of clients audited and the self-management of the LLC has not been an issue.

We can also assume that under audit, these deductions will likely be challenged and it will be up to you to defend the deductions. 

If audited you will have to pass the sniff test.