Stay consistent and take calculated steps to gain momentum!

My budget is in the $200-250K range.Please feel free to let me know if additional details would help, and thank you in advance for your time and advice! 

Selling at FMV avoids the gift tax but provides your child with a higher tax basis, reducing their future capital gains liability.A better strategy for selling below FMV is to sell the house at FMV on an installment note, then forgive interest and principal annually up to the gift tax exclusion amount.

To give you an idea of how we approach it, we assume the worst-case scenario right from the start is 9-12 months of no rent, $5,000 in legal fees, and an additional $5,000 in expenses to deal with moving their stuff, putting it in storage, and dealing with health code violations or NOV's from the city during the process. 

If you can add a legal ADU at $25k in the Austin area then you should add it.  

Agreed - plus two additional thoughts:1) I always recommend having your CPA also review the drafted operating agreement for the tax issues. 

They charge $1250 for properties under $1mm for a 1 to 1 exchange and if you have another property to move your funds into, they charge $550/additional property.

Our country needs four million additional homes.

If you have extra money that you haven't earmarked for additional RE I would do TSM index funds for a truly passive investment. 

In addition I am giving him freedom to explore (to a certain extent) on my dime.