The less confusion, the more efficiency! 

Having more than one LLC makes things very confusing, in my opinion. 

I'm confused why this is a worry. 

That might be the confusion. 

. - Make more moneyI guess I'm just a little confused because this type of funding is backed by an asset and not unsecured.

I am a little confused, you play to buy 8 total units from him though? 

@Christopher DavisI'm really confused, we have actual property management agreements as part of our standard TREC forms.

Since it's so confusing, I try to avoid the "Cash Out" scenario all together.  

You will have a mismatch between depreciation allowed from the federal & state level for the entire life of the property which can create some added administrative burden for some.Just in case there is confusion by the way, you are still allowed to take bonus depreciation under your federal return, just not for the state of Connecticut (among some others if others are reading.

If they decide to renew/extend, you can/should accommodate them by just rolling the Purchase Option payment and rent credits forward but sign new paperwork, new floor price, new mo rent credit.Take $1 for security deposit so it is a separate transaction and security deposit not confused by a tenant with the cost of the Purchase Option contract.