The daughter may have also have an interest in the property by law.

Post Dodd Frank Act and all the new Federal lending laws, proving ATR (Ability To Repay) is the name of the game these days.

Hello. We live in a townhome that has three floors. We rehabbed the bottom floor to accommodate my inlaws for about a year. Since they've moved out we realized the space would be great as a room rental. Our HOA bylaws...

Local laws are loose on owner occupied sfr and short term rentals

Of course, our attorney would draw up all of the necessary documents and make sure that we are not violating any state or local laws with the rent to own agreement. 

Unless they formally agreed to make the repairs you're asking, the only other way you had a firm contract was to accept it 100% as is and proceed based on the original contract - sans request to remedy addendum.If they never agreed to your repair list, they are fully within their right to back out.  

You may have some liability protection for assets not held in the LLC and check with an accountant for any possible benefits from the new tax law.

Note with the new tax law for this year you can immediately expense anything over 2500 as well.

There are so many flippers and private equity firms that compete in this area because the returns can be high.

As a going concern I believe those assessments would be interited under California law.