These two things can do worlds of good for a high net worth investor looking to maximize tax- deferred/tax-free growth and minimize general taxes from operations.

Operating an LTR is quite different from managing a short-term rental , so I'd recommend focusing on mastering one strategy before expanding your portfolio.

I'm ok with gambling on it.

Legaly all rent by the room operations are in violation of hotel, zoning, and rooming house regs. 

Some good questions for him to ask each potential company are:- how long have you been in business- what is your fee (be specific on the number of properties involved and if it's forward, reverse, etc)- where is your operations staff located (ie where will be funds be)- what type of account will my funds be held in? 

Do you have the professionals you need to start an LLC, do the proper real estate/tax accounting, solid contractors to rehab or prepare the property, and a property manager to handle the day-to-day operations? 

The buyer would need to show solid financials also of course (good credit, experience operating rentals, proof of funds for down payment and adequate reserves to cover any unexpected cap ex).

The cost segregation studies that typically yield the highest credits and deduction are for properties valued at $150,000 or more or that have lots of added features such as components to operate or high-end custom finishes.

I hope this question makes sense as this is our first year filing and our first full year of operation. 

If the seller is trying to avoid legal issues with the city for illegally operating a property I would get out of that.