So my wife and I are trying to figure out how to solve our residential housing puzzle...We're currently in a $550K house with approx $200K in equity...House is too big and we'd like to downsize to about a $350K home...problem we've run into is that I lost my job at the end of last year (and am now focussing on our fledgling RE business) along with a 6 figure income - we also own two SFR rentals.

As long as there are separate entrances and sufficient privacy, make sure you're within code. 

It is an LLC, I can't post more on the forums for privacy reasons.

-What about the KBG tactics employed by law enforcement to infringe on privacy and harass people at their homes?

Here’s the catch which I know is gonna cost probably thousands, when we got our house built my great grandfather accidentally built a privacy fence for us 10 feet off the actual zoning on both driveways separating our house from theirs and the neighbors. now one of our neighbors is building a new driveway which is close to our privacy fence and the other one is building more property on his land which is supposed to be ours.

I'm focussing on multifamily investments, so feel free to contact me if you want to learn more or work together. 

This may get trickier, I trade cryptocurrencies - I do close to 200 trades a day at a minimum. 

And just going out on a limb here, if I cannot/should not do so because I am a disqualified person, can I simply register the LLC in a state with excellent privacy laws?

Another method besides mentioned above for CA residents, though very convoluted and many steps is to put those properties into land trusts for privacy of ownership.

Will allow you a bit more privacy and rent potential than the SFR would.