Many shy away from them because they do not want to deal with the extensive paper trail required to maintain separate tax filings for the business.

It seems like you assembled a good team of professionals and more importantly understand the importance of surrounding yourself with these individuals.

Probably due to all the losses they've been experiencing with all the wildfires, floods, etc. of late.We even have a case right now that required the owner to sue their own insurance company, because the insurance company denied their claim on an alleged technicality.

While the general principles regarding LLC ownership, asset protection, and taxation may apply universally, specific legal requirements, regulations, and tax implications can differ from state to state.Good luck!

Furthermore, is there a seasoning period required for this if it is a home I intend on occupying?

To remove the snake and fix the plumbing required demo of both the units bathrooms and removal of the concrete flooring (slab).Curious under what circumstances led to the broken drain snake???!

You are only required to have the property be your primary residence for 2 out of the last 5 years. 

For the tenants that will occupy the empty unit in the not too distant future I can make my own rental agreement, in particular, I plan to let them pay for the water as well, and I will set a reasonable security deposit.But for the tenants in the currently occupied unit:1) Would it be possible to write an addendum to the existing rental agreement to require the tenants to pay for their portion of the water bill?

And actually, there is no statutory requirement that you rent the property. 

Imagine a $2M loan not requiring a down payment.