Most new investors rarely consider the consequences of actually having to work with people and will not even bother learning their state landlord tenant regulations prior to investing. 

The tax You should ask a CPA about the tax consequences.

Normally, when you 1031 up, to higher value property or properties, it's simpler.If you 1031 into something smaller, and did not take on a smaller mortgage, you will have some tax consequences.

What are the tax consequences for investing in syndication project with a self directed IRA?

3- Are there any tax consequences of which one should be aware?

Unsure about the federal tax consequences --- that's a CPA conversation.You can do either a partnership or S-Corp.

What are the consequences of each choice?

I know they are trying to update the law with the choice act because the Dodd-Frank has had unintended consequences that for some reason the Consumer Finance Protection Bureau wont rectify...Former Congressman Barney Frank, who co-sponsored the legislation, said he was “regretful to realize” its negative impact not long after Dodd-Frank became the law of the land.In a 2011 letter to a constituent, Frank wrote:“I do not think it is necessary to include manufactured housing as part of our effort to prevent abusive mortgage practices, and I am now working with my staff to see if we can find a way to make a change that would deal with the problem you correctly point out… “

Some of them know that I am the landlord too; but that is of no consequence really.

One other thing not in my original post, it is understood that an evenutal consequence is that our daughter's basis, when she buys the property, is the low sale amount, which could affect her in the future if/when she sells.It would be better, of course, to die first, and have her inherit the property with a "step-up" basis.