IF the lender does find out the lender can choose what course of action to take.  

@Dave Bobka @Justin Arnold So, if an investor is looking for a larger, family style home for a Section 8 tenant that is dependent upon public transit, this would be a great property, wouldn't it?

Typical equity build up time is 5 years, depending on your market.But can you purchase another rental using your own capital?

Hi Nick, it depends on your goals and what you're looking for.

It also depends on the complexity of your flip and how your bookkeeping has been for expenses.

Their contribution depends on factors like local demand for ADUs, their design and size, and how they’re used (e.g., rental income potential).

If you choose to go with this strategy you could complete your exchange and immediately do a cash out refi.

Whether you need a CPA with just three rentals depends on the complexity of your situation and your comfort level with DIY tax prep.If things are pretty straightforward, you might be fine with tax software for now.

thanks for the guidance @Kaushik Sarkar Since it's development it will take longer to get to the exit. 3 years could be right depending on the market, if the project requires entitlements, how long it takes for permits, no major utility obstacles, etc.

Depending on the situation, a taxpayer could offset some of the passive losses with active income.