Your primary trade-off is now clear:Access Equity Now: Accept the $1,400/yr tax increase and the other tax consequences (like your dad's depreciation recapture bill) to get the DSCR loan now.Maximize Future Wealth: Leave the property in your dad's name, avoid the tax hike, and preserve the massive benefit of a stepped-up basis upon inheritance.The other tax questions (gift tax, depreciation, etc.) are important, but they are secondary to this fundamental Prop 19 reality.My immediate advice is to model whether the deal still makes financial sense with the higher property tax expense.

As a property manager for 10 years in Indy market we see what these assets trade for and this is very high.

It is highly recommended to consult with a legal and tax professional before proceeding.Pros of deeding your STR to an LLC     - Liability protection     - Asset Protection     - Separation of Finances     - Tax Flexibility     - Enhanced Credibility     - Privacy and anonymity     - Easier ownership transfer     - Simplified estate planningCons of deeding your STR to an LLC     - "Due-on-sale" clause     - Increased costs and administration     - Potential tax consequences     - Need for separate finances     - Loss of homestead exemptionGiven the complexities involved, especially with potential lender issues ("Due-on-sale" clause), tax consequences, and the necessity of maintaining corporate formalities, it's highly advisable to consult with an attorney and a tax professional before making the transfer.

Are there going to be any adverse tax consequences? 

Sounds like your trading background will give you a good edge with numbers and patience.

The long-term fixed rate trade is an excellent one with time on your side.If you're building wealth, older,  and have obligations, it's likely best to find a happy medium and understand to eliminate debt appropriately.

Offsetting the consequences for energy use is almost impossible.

You want the contract to clearly outline responsibilities, payments, and consequences if the buyer defaults.Communication with the Lender – Even if you don’t notify them directly, it’s good to know your loan terms and options in case issues come up.Basically, sub2 can be great for sellers wanting out quickly, but it’s important to protect yourself legally and financially.

NOTE: you have to be careful to do this legally or at least know the consequences...

Appreciate any intros, perspectives, or war stories from the trenches.Always looking to trade insights, let’s connect.