I became interested in the syndication deals because of the low risk it would have on me up front.

It can provide education for the process and reduce some risk.

There is a reasonable chance that you could be required to convert it back to a 2 bedroom, so you would have paid for the extra square footage I would expect to pay for the original square footage and have the price discounted from that for the extra hassle and risk of dealing with the code enforcement officer 

The same risks that your parents experienced when they managed it as a rental would still apply for you.

Risk is not something that you are worried about, but you were 13 years old when the biggest crash in a century hit America.

There is risk here. 

The best way to do this since it is a one off deal is to buy the property as tenants in common, your LLC as 50% and your partner as the other 50%.For me, coming in to an existing LLC as a partner means I am at risk for any law suites, etc you may have or may have coming against that entity.

Keep in mind, the greater return the more risk, so the areas aren't the best so you need to have a good team in place.

I believe I have a pretty good idea of what I need to do and ways I could mitigate some of the risk.

At least for me, that would be way too much risk, what if the exact opposite happens like in 2008?