One way of doing this would be to keep everything currently in your father's name, create a living trust, and son and daughter would be beneficiaries of the trust, and properties will remain in that trust upon your fathers passing in the future, from there you will have options as to what happens. 

We've spoke with multiple banks at this point to get a few options. 

I thought going in that we would start an LLC but have come to learn that LLC's have very limited lending options for real estate and that our LLC would require us to file taxes as a business because there are 2 of us.

If you have a single member LLC that changes to a multi-member LLC, you may have a 754 adjustment for the increase in basis of the partnership assets.I.E.

Kayla - At Stevo mentioned you definitely have some options.

There are a few options, but before you think of paying them off...can your money make you more doing something else?

You can continue deducting mortgage interest and depreciation if the property is owned by an LLC.If the LLC is multi-member, your share will be based on what the LLC agreement says.

You might consider cutting your losses and selling it, or investigate STR options.

Yes you can put it in a CD, there are also many other investment options in real estate and outside real estate that still make sense today.

I've heard renting 3 bedrooms is a very crowded market so thats why im looking to do the smaller 1-2 bedroom options Im concerned about all the competitions and the somewhat transient nature of the city.