My firm in Colorado is looking for a potential joint expert in a divorce matter to appraise a rental property in San Fran. 

He didn't explain why he thought that, but seemed genuine enough, however without certainty.   

Jointly held property gets split, and if she doesn't have $400k to shell out in order to hold the asset and buy out the other partner she'll have to sell.

Question 1: Is it necessary to file the LLC separately for tax purposes or can we still include it on the Schedule E form in our joint tax return?

I think it will be a great joint venture for us to grow our wealth.

This was given to us from family and it intended to set it up as joint tenancy so as the brothers died it would end up with one person owning. 

For all these reasons, I saw this is a big downside to the property, but the owner seemed genuinely happy and thought it was a great asset that the property was listed as commercial.

Both me and my wife have W2s, 1099s and few LLCs that either owns real estates, having an active retail business, and for investing with other joint ventures.   

As said above that is when the length of ownership becomes important to your CPA.However if you want to avoid that complication and you reside in a non-community property state  and you file a joint tax return with your husband you could have the properties quit claimed into a true single member LLC (either you or your husband as sole member) and elect to be taxed as a sole proprietor. 

I've learned that you get a tax exemption for capital gains up to $500k for our joint return when you sell a primary residence.