Additionally, lenders may consider various factors such as past income statements from the subject property or income statements from similar properties nearby, managed by professionals.

Any time I've done an addition, I had to raise the floor to match the rest of the house.There is one unethical hack I've seen for the floor issue -- calling the garage conversion a "storage conversion" (not classifying it for living purposes).

I'd plan to pay off both loans within 5-7 years with cash flow from the rental and other income and assets.I'm an accredited investor and will still have more than a year of expenses covered in liquid assets and additional funds to buy another 1-2 properties in the next 2 years, which is my goal.I don't know if I've provided enough or the right information to get some opinions if what I'm planning to do with my current house and new home purchase makes sense. 

So, for example, I can have separate sub accounts for each property's security deposits, CapEx and even profit in addition to my general bank account for each property.

If you more than one owner/member in a LLC, the LLC will file a 1065 partnership return, but all that does is spit out a K-1 (like a w2 or 1099) showing the profit / loss that you need to report on your 1040 form.If the LLC is single member, then you will basically continue file addition SchE for your long term rentals. 

Here's an article with additional FAQs on cost segregation studies that you may find helpful.

@Zak DolakHow important is access to the additional 100k to you?  

At some point an offer will be accepted.Off-market deals can get you great deals at discount, but it's not easy.

For Redfin to show comps you may need to login to view the past solds, if no sales data just discount a few % off the listing price since some markets are going for near retail anyway.

I am not an expert on that process, but the question remains:  why are you entertaining taking this additional risk?