If you do a 1031 transfer you will eventually have to pay taxes on it unless you die owning it and pass it to your children. 

I can essentially serve as a property manager: tending to the house (cleaning, maintenance, etc), working and coordinating with any affiliated contractors, and I can even perform rent-roll, T-12, or DCF financial analysis for you on the property, or look for other properties as well.

@Ashley WynnThere are plenty of discussion threads, if not daily new ones, about transferring properties in/out of LLC and the risks/issues.

I do not intend on transferring the property ownership to the LLC, however, wanted to get you guys’ input on whether an LLC is beneficial for business operations (i.e. bank account for income and expense, direct deposit for rent from house hacking, etc.)?

When I started, I gave tenants my bank account number and told them they had to deposit or transfer the money into that account by the due date in the lease. 

Would you suggest I still look at more expensive options or is it easy to transfer the site over later if I do decide to do more with it?

Would the transfer of property be considered at the end of 5 years when the option is exercised?

For example, I was hoping to write off the cost of the LLC formation, wire transfers, and advisory fees.

The only way we could find financing on this small of an amount was through a mortgage broker who then transferred the loan to another lender (Wells Fargo).

Are you buying it individually then finding a lender who will transfer the mortgage to your LLC?