Since rental losses are typically passive, the best way to offset W-2 income is through Real Estate Professional Status (REPS) (750+ hours) or Short-Term Rentals (STRs) (100+ hours and more time than anyone else managing the property), which allow real estate losses, including depreciation, to offset active income.A cost segregation study accelerates depreciation, generating large upfront deductions.

In my market the valuation with f/f non commercial financing is typically lower than the hands off cost of adding the ADU.  

But if borrowing costs remain high and interest rates don't fall as many people expect, cap rates will have to decompress further. 

Imagine if it cost 1000 to send out 50 letters but half of them responded and half of those wanted an offer and half of those accepted an offer and half of those closed and half of those resold for a net 50k. 

There is a monthly fee associated for this but if the tenant is serious you can offer it to them at cost.

What are you hoping to get out of the extra time, work and costs of having the LLC?

Sometimes you can get the school district population.Right now the cost to build is to high for C markets.  

What can I expect for timeline, potential issues, rough costs? 

Tenant shall be charged $[amount] to cover the cost of this force-placed insurance.The other lesson is that you should never hand over keys until you have proof the Tenant has met all requirements.

@Fabio CattolicoFrom my experience, balancing career growth, cost of living, and real estate goals is a smart move.