Im leaning towards option 2 because option 1 will be too costly if the pipes freeze, heat exchanger of the furnace crack, etc and there's no guaranty she will pay for the repairs.

With investor's properties, depend on how risk averse they are, I fall under either just follow their criteria or maybe coach them my insight if I feel they are open to ideas.

I’m here to connect with like-minded individuals, exchange ideas, and continue learning from this incredible community.

paid cash from a 1031 Exchange How did you add value to the deal?

This is a long revived post- I'll add a little tax pro insight from what's happened in the last 2 years The IRS went from < 100 engineers on staff who were qualified to audit cost segregations to a few hundred. 

Thank you all for the insights! 

Explore my personal favorites, Set For Life by Scott Trench or The Total Money Makeover by Dave Ramsey, for invaluable financial insights.3.

They claim only 2-3 percent of the companies are audited so the more clientele they have the percentage of audits will be less even if they make some calculated risks.Few Deductions they highlight which you can get with proper planning and right CPA.1) 119A - Revenue stream bifurcation2) Augusta Loophole 280A - use primary residence for 14 days of business and pay you back without tax implications.3) Paying your medical and children education fee using c-corp4) offcourse the famous charitable llc - another program and package.Thanks for the insight.

Quote from @Brenden Goldman: Thanks Benjamin for your insights.

Just note that you guys may end up in what I call the "1031 exchange until you both die" cycle.