So the basement ADU brings in plenty of revenue to make the upstairs owners mortgage liability equal to that of a small townhome. 

Thanks to the Cost Segregation Study, the property investors accelerated the depreciation that the first year depreciation was approximately $394,000.The use of the accelerated depreciation strategy helps real estate investors to reduce the tax liability immediately which therefore increases their bottom line due to the offsetting of income.

Using an LLC can provide liability protection and business structuring.

While it’s not required to hold your rental in an LLC, doing so offers liability protection but may result in higher interest rates. 

-The rehab has it's own liability policy that I believe will add me as a named insured (I need to verify this.)

I would not open myself up to the liability of temperature settings.

Think of it not as ‘getting money back’ but more as reducing your taxable income, which can lower your overall tax liability.

It’ll position you to have more cash available for future investments.In terms of setting up a real estate business, forming an LLC could provide liability protection and allow you to keep personal and business finances separate.

Builders risk, general liability, etc. are all purchasable by the owner.

Your primary insurance policy with $300,000 in liability coverage should be sufficient in 99.999% of all lawsuits.5.