I'll bet you would dig thru 1000 properties if there are that many to find a decent OTC deal in Texas. 

Purchase price: $55,000 Rental property in Dolton, IL.

What time of property are you considering?

My issue is that in our area if vacation rentals are not allowed the property values plummet!  

I'm not quite certain of what you are asking.is there a date set for a sale for a property with a VA loan or has it already gone to sale and is now owned by the bank? 

My assumptions based off research is I will be able to deduct 1/2 of all allowable expenses based off the ADU square footage (My understanding of that list below)  1/2 Mortgage Interest (Not principle) 1/2 Utilities 1/2 Property Taxes 1/2 Insurance (assuming I don't have separate ADU insurance)  1/2 general house maintenance (depending on the issue and if it's related to the ADU)  1/2 Depreciation (Home value, not land divided by 27.5)  KEY QUESTION: If my mortgage (PITI) is $5400, and all of those ADU deductions equal $3800 monthly, and my ADU income is $1800 monthly, am I allowed to pay the difference in "deductions" from my real estate business income? 

I was seeing similar properties in the area $300-$400K. 

So if you are going to take on the risk of buying an investment property, it needs to be worth it.

Has anyone come across any issues with insurance being enforceable if they transfer over a property from a personal name to LLC with a loan on it?

Definitely market specific, I have a few properties around the country and work with a lot of investors in almost every market.