In poking around initially here there seemed to be an outstanding question of the asset being owned by an LLC being an issue? 

It's in a pretty "high demand" area in Silicon Valley so I don't foresee an issue selling it, it's more about identifying the replacement property that will be challenging.

If you ever showed up before a judge because a codes inspector brought an issue against you, i think the court would be very hard pressed to prove you don't live somewhere.That's just my opinion.

I have never hit our renovation budget, it’s always been over because of hidden issues found during renovations.

I found an REO with a "special condition" that seems to scare others away but I see as a non issue opportunity. 

Your schedule E tells the story.Could your tax specialist have been referring to some state issue and community property? 

In regards to your next flip, I bet you will have no issues cutting the flip time in half now that you've worked out the kinks in your planning, timing, budgeting, etc.

By then I've already terminated the contract with the seller because they wouldn't renegotiate based on other issues I found with the property.And the land survey company still demanded a full payment after they delivered report late.Is it normal for land survey to take this long?

I would ask the lender, but probably not most lenders want you to have skin in the game, even the seller takes on a lot of risk if you don't pay, because they would not be first loan position. 

They are way overpriced or some major issues with the house.