Do not give any special treatment. 

What some of the more optimistic folks will say is that the general non-taxable treatment given to contributions into LLCs taxed as partnership under sec 721 and the carryover of basis of the property into the LLC make it hard for  service to argue that a contribution of that sort would be taxable simply because it falls at the end of a 1031 exchange (Their words  not mine:).And since the exceptions that would make it taxable are 1.a disguised sale (not if both contribute equally into the LLC), 2. a contribution of not property (not is both contribute real estate and cash), 3. a gift (doesn't sound like this is the case),  or 4. a contribution that results in a reduction of the taxpayer liabilities (doesn't sound like that here either).   

An accountant would also be a good idea, as there are many tax rules for the treatment of passive income and partnership income.The following is all intended to be read hypothetically and not as advice to you specifically:In a general legal sense (again, not specific to your situation) this is usually a slightly more complicated situation than it might seem.

Brought out 3 termite inspectors who informed me that they can do spot treatment, but that termites have most likely infested in the exterior walls and roof, possibly the basement as well, which will require fumigation.

I'm not looking for any special treatment from him but if he knew we were interested he might dissuade us or possibly work with us to dispel my concerns. 

They have conservative leverage, put high skin the game, have been through multiple real estate cycles with no investor money lost and have very favorable tax treatment.

Make sure the lease spells out a hefty penalty like all new paint and carpet etc - in reality most of the time an Ozone treatment wil take care of it. 

@Mark DotyWanted to share with you a great way to tap into the equity built from your ADU.The problem today: most appraisers used by traditional lenders would give ADU square footage a second-class treatment than the main house (as some of your mentioned above) since there aren't that many comps and they're trying to be conservative.However, you can consider taking out a HELOC/doing cash-out refi through Figure.com (HELOC up to $250k, Cash-out refi up to $1M).

The worst problem is that it's just about impossible to buy shrewdly in a city you don't know well, and you're not going to get the best deals and treatment from people who don't know you and see you as a long term customer. 

Two different treatments.