If the subject floor is not perfectly flat, pour a self-leveler over the existing flooring (read the instructions on the bag FIRST). 

They lend you the money you need to buy their house.Subject to - you buy the house subject to the existing mortgage.

In that case you would be buying the house subject to that existing mortgage and borrowing an additional $100k?

This is more tax efficient as the interest you collect would be subject to ordinary income (outside of an IRA, whereas in an IRA, there’d be no tax on this.

They are also coming in on work contracts that are subject to change. 

@Brad Herb Investing in a syndication via a Self-Directed IRA (SDIRA) offers tax advantages but comes with fees and limitations:Advantages:Tax Benefits: Gains grow tax-deferred (Traditional SDIRA) or tax-free (Roth SDIRA).Avoid Penalties: Keeps funds in the IRA, avoiding early withdrawal penalties.Diversification: Adds real estate syndications to your retirement portfolio.Disadvantages:Fees: Setup, custodian, and administrative fees can reduce returns.UBIT: If the syndication uses debt, income may be subject to Unrelated Business Income Tax (UBIT).Complexity: Strict rules; all income/expenses must flow through the SDIRA.Illiquidity: Syndications are long-term, locking up funds.Use an SDIRA if the investment is significant and the UBIT impact is minimal, especially with a Roth SDIRA for tax-free growth.Remember that RE, outside of retirement accounts, provides the biggest tax benefits.This post does not create a CPA-Client relationship.

Even if you create a non-CA LLC, if you are managing the business from California, you will likely be deemed to be "doing business" in California and therefore likely subject to CA taxes.

I appreciate your thoughtsSorry for another question, I still beginning my searches about this subject, in this case do you have a LLC holding managing all other companies or all of your companies are totally independent?

It's essential to verify if your property falls within such a mixed-use district.Special Authorizations: In M1-2D districts, residential uses may be permitted by authorization from the City Planning Commission, subject to specific conditions and bulk regulations.

I'm curious what he ended up doing, but I would definitely suggest checking out this episode of BiggerPockets Money that talked about this exact subject!