I think a legal life estate is often used with estate planning where older parents deed their house over to their children but retain a life estate so the children can't boot them out before they die.

You can have additional adults (and children) on a lease as occupants rather than tenants.

The southern portion of the 710 Freeway, a roughly 20-mile stretch that runs from Long Beach to Alhambra, is congested with diesel-spewing trucks that deliver imported furniture, auto parts, electronics and clothing across the country.

I had been considering something similar on my commercial plaza a few years ago with an almost identical sounding owner/children/capital gains scenario.Ultimately the previous owner ended up just selling to me but with a low down payment and he is holding the note.

Especially if you are dealing with school-age children (which amazingly enough is an important factor to a high number or tenants, not just parents of school age children . . . go figure) you can pick your poison on the front end . . . want lower purchase price, higher cashflow (ignoring vacancy and turnover costs), but dealing with more frequent turnovers? 

The classic children's book "If you give a Mouse a Cookie" can offer the best insight on this (kidding...kind of) Once this road begins that's when other things can happen as well and turn into  a game of he said she said.

They'd like to move these assets into cash flowing assets like syndications and apartments to increase cash flow to benefit their children (my sister, brother and myself).

In some areas you cannot say no to a child care business as long as it is under X number of children. 

When you convert the property into a rental, you will use the fair market value of the furniture and get bonus depreciation deductions on these.

I'm ready to begin my journey to financial freedom so that when my fiancee and I are parents I'll will have time to spend with my children as they grow up.