Additionally, If your city does not have their own individual ADU compliance rules signed into law and regulations by Jan 01, 2020 they must default to the state rules with no additional requirements.John, my understanding was similar to yours regarding parking, the property I just purchased in Anaheim with detached garage is less then .5 miles from public transportation, yet my initial ADU report from Hausable states I need one covered parking spot.  

Cost segregation combined with bonus depreciation is huge.A lot easier to 1031 one 100 unit property than 100 individual houses.Apartment rehab often stays below the $2500 de minimis safe harbor per item (because apartment communities don't pay retail) - which means immediate deduction and no future depreciation recapture (i.e. an HVAC replacement may only cost $2400).Some apartment rehab above $2500 per item can be immediately deducted if it does not meet the 20% "unit of property" rules (i.e. replace one HVAC system in a ten unit building).

Also consider how you will title the LLC interest (individually, as tenants by the entireties, JTWRS, etc).

The tenants with Section 8 "Housing Choice" vouchers will either be able to afford to rent your unit or not.

So my suggestion is to educate yourself so you can make a choice on what direction you want to do.

The partners are a stellar group of individuals who have integrity.

Remember choice of words and presentation matters.

They made 50 percent return this year on one stock (that they bought individually).

Your choice. 

The first thing I did with my partner was form an LLC but we have a great deal of individual assets that we want to protect, but that may not be your case.