I'm born and raised in San Francisco and ran into the same issue when I was starting off in 2021.

It is certainly immoral to raise funds without updating the information on a deal, but is it illegal?

I’d just raise rent by $5 per month lol 

Then it is a win-win-win situation, investor wins because he does not have to go do a lot of research , invest smaller amounts, get a single K-1, sponsor wins because he can raise larger amounts from a single fund of funds entity and fund manager wins by generating income from the spread.

I am in the early stages of developing a program to help people looking for raising private capital. 

My CPA has advised not making any moves until 2025 to avoid raising red flags ie cost seg, putting into service, and then selling all in the same year. 

If not, raise the rent.

I was raised in Queens, NY.

The play is a 3 to 5 year hold, raise rents to get the valuation up to 600K and liquidate to 1031 into another investment.

The biggest issue with self sufficiency test is conservative underwriting on rents or using current low rents. 90%+ of my clients raise the rents drastically in Chicago after purchase.