You’re property is code compliant and meet DNS regulations so I think it would be a long attorney battle between the tenants before you could get pulled in somehow.

Also were they sending compliant monthly statements, collecting escrow and providing escrow analysis each year?

Meaning, if you're not compliant you can do things like inadvertently take a distribution that would give you a tax hit, or go above your contribution limits.  

.- Make sure you stay compliant with the laws and it's a STR-friendly area (repeated because it's important!)

@Jessica Singh, Sorry to say it, but just about any investment that is 1031 compliant, low risk  and delivers 15% is just about, well... almost non-existent. 

Hi @Andrew B.Sorry to hear about the tragedy.It may be easier to find a local group that is already established (501c3 compliant).

@Ben KnieslyI can ask around.. send me a direct message so we stay off the open forum and stay compliant with the rules about marketing...  

With FHA, they may flag the additional units as non compliant.

I'm not sure I'll need that, but basement with legal bedroom will give more equity I guess.More important - those updates that I want to make anyway - I'll spent money to make it more code compliant and livable but, not officially.

There are two processed by which you can get the property to be compliant in the City's eyes.1) You can apply for a non-conforming use.