There's your seller, there's your house, go buy it.Between the labor issues, the supply chain, bla bla bla, driving up costs of "downgrading" an SFR into a SFR w/ ADU, and the fact that on the existing home market it is viewed as a "downgrade," there's no argument in favor of building.

@Joyce Kim if this will be a residential small rental (not commercial) and you don't have unrelated partners,  all an LLC will do (especially SMLLC) is limit your financing options, weaken your title chain and hazard/title insurance when you quitclaim, complicate your tax reporting and give you a new and unnecessary annual $800 bill from CA.  

Get a title company involved to make sure what is showing up on title chain other than bank loan.Even though I am a Realtor, I would advice you to seek a Realtor or real estate attorney or both to make an offer.  

There's some solid answers in this chain.

I saw HUD as a Grantor on the most recent chain of title.

If you want a national chain, you'll likely pay a higher split and an brick and mortar to call an office.

If they are paying for a dorm/meal plan maybe you could find a quad or duplex and they would be willing to co-sign or buy it and let you manage it for free rent and experience?

@Jan Ferry-AxmanThe Rollover as Business Startup is designed for operating a true business, not passive investment holdings.If you have multiple properties on short term rental, and are providing services to tenants above and beyond just a place to stay (access to gym, meals, laundry, etc.) then vacation rentals are considered a business (like a hotel) and not passive real estate rentals. 

I have a call in to the city running it up the mgmt chain -- The property is under one address with the assessor, and metered the same way for water.  

Even a conventional sale could have a IRS lien or a chain of title broken.