@Dan Jurkovic - depending on the level of privacy you need, I’d also consider a split level or house with in law suite and rent to other freshly graduated professionals.

This is too broad, it depends on what the law suit is for.

If you fail to follow the rules, you may open your personal assets to a lawsuit.

I have talked to a few lawyers about this so if they find her at fault she’ll be named in the lawsuit as well as anybody else at fault.

There are already a few large companies doing this and have been involved in a few lawsuits already. 

On top of which, if you’re thinking basement apartment (vs. a unit over a garage or a mother in law suite type) you should begin researching the states rules around basement occupation building code.

All of these would require a lawsuit.

Don't want to be vulnerable to lawsuit because we didn't follow code. 

And since a majority of law suits in real estate come from a lack of disclosure I do think there is some increased liability being consumed by a FSBO since it is just a bit harder to prove you didn't have intent (or really you've got more incentive to) misled. 

@Joshua PeglowWe work with a lot of house hackers in Denver and Colorado Springs who are looking for that mother-in-law suite, basement apartment, ADU thing.