Best for personal protection, and tax purposes when first starting out?

I would recommend learning about raising money legally and Partnerships.   

A in-law suite is not a legal rental so the appraisals are not comparable.

You also have to assume the terms of the lease (rent rate, end date, unfavorable legal clauses) when you buy a property occupied. 

The cost should varies based on location, units and etc. legal fees (eviction fee) maybe necessary depending on the targeted area.

One legal bill, one speeding ticket, one car wreck or car repair, one unexpected high utility bill, birthdays, holidays, forced time-off from work, etc., etc., etc... 

We filed a claim prior to July 1st, 2019 but fear that we will recover very little of the investment money due to: legal fees, court battles, cost for maintaining the properties prior to sale, and the fact that the total value of the properties is estimated at 60% of the total amount people invested in the ponzi scheme.

We wanted to put our daughter's name on the title along with ours, so we waited to close until just after she turned 18 and was legally able to sign paperwork, closing in February.With help from our Michigan-based contractor, who lived in the house while working on it, we converted the 1st floor back to residential use, adding a large 6th bedroom with walk-in closet, another full bathroom, a study room, and a living room, and made a myriad of small improvements. 

You will want to negotiate a move-out plan that will be the least stressful and most efficient for all parties involved.If you want the renter out because they're a really bad tenant (not paying rent, causing property damage, disrespectful, and/or dangerous), then do so as quickly as you can, with the help of legal counsel.

Specifically, (1) always use a closing attorney and legal contracts.(2) Always be honest because there is never a reason not to be.