Then I have a separate Addendum to the lease that lists in plain language the "rules." 

S-corporations are still subject to some corporate tax provisions, which generally make owning real estate not as attractive for long-term ownership.In the simplest form, a single member LLC offers the best of both - strong legal protections if the LLC formalities are maintained (separate bank accounts, annual member meetings, etc) and easier income tax compliance on your Form 1040 (no double tax, no extra return, no corporate income tax rules).If you add a partner to a single member LLC (aside from another disregarded entity you own), you then have to file a partnership return (Form 1065).

The benefit of having each property in a separate LLC is the ability to place each property in its own compartment.

It is two separate properties (multi-families) here in Miami Beach, FL.

My thought was to leave them as two separate units but if somebody wanted to rent the whole thing, they could do that as well, as the units are side-by-side.

And might it be possible for an LP to leverage a 1031 exchange for a separate syndication where he now acts as the GP? 

I understand that i'll need to account for depreciation recapture separately. 

I thought about erecting a cardboard barrier, or some other means of separation, similar to Craig Curelop. 

I charge a separate deposit and *require* renters insurance maintained at all times with myself as additional insured.

NOTWITHSTANDING SECTION 65901 OR 65906, EVERY LOCAL AGENCY SHALL MINISTERIALLY APPROVE THE CREATION OF AN ACCESSORY DWELLING UNIT IF THE ACCESSORY DWELLING UNIT COMPLIES WITH ALL OF THE FOLLOWING:(A) THE UNIT IS NOT INTENDED FOR SALE SEPARATE FROM THE PRIMARY RESIDENCE AND MAY BE RENTED.