We will be raising rents on both units to $1000 for 12+ month- only an offer we will make to the current tenants if the choose to renew their lease.

That's how and why I choose to buy in a cheap neighborhood. 

I had basically a menu that people could choose from to do a variety of repairs.

If you are dead set on house hacking a multiunit w/ a STR, the location you choose to invest is very important.

Why would I choose an unlicensed, uninsured person to manage my bnb with them getting all the upside when I can hire a licensed, insured professional to manage the property where I get the upside.   

@Genny Li has the best idea, albeit the most expensive :-)If you choose to go with adding an external condenser to your current FAU system, you will probably have a problem with the duct size.

So many factors to choose from. 

You could choose to pay none or all of them if you really wanted to, but could be at a disadvantage based on other landlords' preferences.

From what you say about quit deeding into an LLC, it leads me to believe that you would choose a commercial loan for the refi as commercial lending would allow the LLC to be the Borrower on title (as long as the LLC and/or property can qualify for the loan). 

How they choose to structure their family isn't your  issue as a landlord and you are not liable for the future well being of these children.