Supplement this far simpler entity approach by ensuring you have appropriate types and levels of insurance, you operate your business in a manner in which your conduct is not considered an exclusion in your policy, you work with licensed and insured vendors, you execute contracts with indemnification clauses with these same vendors/ require additional insured status &  maintain appropriate licensing and permits.

Additionally, the replacement property must be real estate to qualify under IRS rules.

I did just have my first GVR guest (arriving 1/14) ask me for one additional bath towel and face towel for each of the 3 guests.

Hey Tim, If you are not using Hospitable yet that would be my first addition.

In addition, you'll have depreciation recapture at rates up to 25%.

I read the actual laws on the books in addition to seeking investor input on this site.    

Additionally, she stated she doesn’t want to pay either.

This initial negative equity position consumes the initial cash flow.  2) the addition of the adu makes the property multi family and likely makes rent control apply.  

So I saved an additional $2500 in taxes after the fact.

Ya have to learn to mitigate multiple hurdles, in addition to making intelligent and educated moves.