Yes, the right way as not to be taxed more on your property value.And do you need a bank account dedicated to the LLC?

Location: Chesapeake, VA (large military town) Market Value: $360,000Loan Balance: $245,000Equity/Second position note: $115,000 (30 30-year amortization / 10-year Balloon Payment, 6.5% Interest, $727 monthly payment) - Bringing cash for this would save a ton of money for the buyer.Rate: 2.25%Years Left: 26Current Monthly payment: $1,300 (including taxes/insurance)Current Rent: $2,000Scenario 1: -If you were to purchase with a new VA loan at 7% interest at market value your monthly PITI would be approx.: $2,757-If you were to assume the loan and I carried the second note at the above terms your monthly PITI would be: $2,027Saving: $8,760 per year.Scenario 2:-If you were to bring the same $115,000 as a down payment on a conventional loan you would pay: $1,992-If you were to assume the loan and bring cash for equity position your monthly PITI would be: $1,300Saving: $8,304 (with no need to refi in the future)Since this is a hypothetical situation I'm going to give my number based on nat. average homeownership of 13.2 years.

If you are interested in moving your entire portfolio, would you peel off (tax purposes) or dump everything?  

But considering all the expenses (PM, leasing fees, cap reserve, maintenance, taxes, etc), it has been showing as negative cash flow. 

That said you would be refunding for the time that they do not use in a month.

Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable).

The $100,000 cost of the original structure in 2021 would not be depreciated further because it was demolished.So, for tax purposes, you would only depreciate the cost associated with the new construction, not the original structure that was demolished.

One thing to consider when you are budgeting is the taxes and insurance.

My insurance and property taxes are also set up in this manner. 

If it's important to be near the Bay area then maybe consider the Tahoe Reno, NV market because it's only a few hours away if you need to go to the office and it offers a landlord friendly environment, low property taxes, and no state income tax.