"Unfortunately this is a residential unit"

By an LLC, so that offers some perspective to the operation.

"The LLC's intention was to be profitable while in certain instances doing good for individuals within the community."

So, that's a niche and intent. For instance, my town has the most Not For Profit organizations per capita, right behind Berzerkley, CA. That means we have, as an example, housing programs on offer to those needing a hand up, not a hand out. The landlords have put their properties in the availability pool and there are eligibility terms (similar to section 8), such as International Rescue Committee housing. I promise you these units are not charged rent at FMV to the general market, which includes the University here.

"if it is substantially less than the rents charged for other properties that are similar to your property in your area"

In your area, of that type, and for that similar purpose. Also taking into consideration what performance measures the tenant has to meet to be able to rent that property, such as yard work and general responsibilities and maintenance, similar to an on site manager. And perhaps meeting Parole Officer requirements, clean drug tests, proof of required attendance to rehab or retraining classes or certifications, children not being truant, applying for and keeping jobs. One of my largest clients is a pre-release center. There can be out-living placements still under the terms of the pre-release.

A clear intent to sidestep a FMV requirement is not the same as a reasonable justification for setting an amount to charge for rent in specific circumstances. Doing a FMV rental study and comparison won't apply to dissimilar property.

It's like "innocent until proven guilty." Your client isn't the party that has the onus to declare if there is a problem, consider it a problem, and demand an adjustment to resolve a problem. Your client has an operational intent that still may meet due diligent.

I side with Bob in this example: this is a hot potato that doesn't need to be handled, most likely, even if there are clear amendments needed elsewhere.

(CAGMC = come and get me, coppers)