The SMLLC was treated as a disregarded entity for tax purposes (married filing jointly). 

Hi all I am new to Bigger Pockets, although I have been a landlord since 2013 I am starting to treat this as a business instead of a side hustle.

RobinHave the neighbors been treating the property this way for a long time?

Suggest treating the areas and possibly installing sister boards to firm up the beams.

I Have done many deals in the past with this investor and he's always been the easiest guy to work with, has treated me fairly and understands that our relationship is more important than any one deal.

I don't think I could picture treating a potential partner that way but I don't think that's what they're after anyway.

a 2 member LLC has to be treated as a partnership and file it's own tax return. 

If you plan to close the LLC in 2024 or 2025 and transfer the DST interests to the individual partners, this transfer could potentially trigger taxable events.Distributing the DST interests to the partners might be treated as a sale or distribution, which could invalidate the 1031 exchange and result in capital gains taxes.

I have given a 30 day notice and told them their machines will be treated as abandoned property on Aug 1st. 

This "guest" will be a tenant in the eye of the law so then you should treat them as a tenant and properly screen them and have them added to the lease.