My issue is that in our area if vacation rentals are not allowed the property values plummet!  

I'm not quite certain of what you are asking.is there a date set for a sale for a property with a VA loan or has it already gone to sale and is now owned by the bank? 

My assumptions based off research is I will be able to deduct 1/2 of all allowable expenses based off the ADU square footage (My understanding of that list below)  1/2 Mortgage Interest (Not principle) 1/2 Utilities 1/2 Property Taxes 1/2 Insurance (assuming I don't have separate ADU insurance)  1/2 general house maintenance (depending on the issue and if it's related to the ADU)  1/2 Depreciation (Home value, not land divided by 27.5)  KEY QUESTION: If my mortgage (PITI) is $5400, and all of those ADU deductions equal $3800 monthly, and my ADU income is $1800 monthly, am I allowed to pay the difference in "deductions" from my real estate business income? 

What time of property are you considering?

I was seeing similar properties in the area $300-$400K. 

I have thought about looking into a property management for the ease of managing the properties.

So if you are going to take on the risk of buying an investment property, it needs to be worth it.

Reasons to sell the seller on the Owner financing might be, because you are going to do a substantial rehab to the property, or that the property doesn't have any buyers, and this is a way to sell the property.Seller Financing works a lot better when there is not a realtor to pay, where a realtor's commission could be 6%, which on a $300,000 Purchase would be $18,000.An additional option you might consider if you are looking at purchasing this property to do a flip, or fix and rent, is you could propose seeing if the seller would partner with you, and you would secure a Private Loan for 50% of the sales price, plus the rehab, and if there is enough upside equity, you would probably be able to do a cash out refinance and pay off the seller that way.

I live in a cheaper market with a lot of sub-75k properties.

Has anyone come across any issues with insurance being enforceable if they transfer over a property from a personal name to LLC with a loan on it?