You would be well served to check in with the HOA on proper replacement.

@Wayne Brooks im just learning how to use the worksheet that is why I asked for the flaws so i can properly analyze the deal.

I'm getting highly differing feedback from my lawyer and CPA on the proper structure and taxation of Texas Series LLCs.

You got cash for an increase in debt.There may be debt-financed distribution concerns but that is another story.Regarding your structure - a little complex but if you keep the proper books among all the entities...sure...

SHE should be talking to a professional who knows her entire situation and can properly advise her. 

A lot of houses in the area are selling at a discount because they need to be updated or have their foundations raised to properly prepare for flooding.

On the insurance question, I would imagine you would pay a little more since it’s extra living space someone would be occupying (slightly more risk).However if it really is a family member and not a tenant, then I wouldn’t imagine it would be a lot more.You can ask your insurance agent this before you buy though, and s/he should be able to give you an estimate of what the whole bill would be.You definitely want to keep your insurance agent in the loop about your proposed use for the building/space, especially before you buy, so s/he can make sure you have the proper coverage.

We bought our first single family rental property in 2016, not really knowing why or how to properly run it.

My concern is not properly planning my renovation budget.

IMO, I think the unit runs adequately and is habitable for the time being while I can figure out how to properly install a new unit It is important to note that because of so many issues to replace it properly were presented and no one offered an immediate solution, it took me too long to start fixing it.