Never invest in any city on this list of the 50 most dangerous US cities.Low operating costs: High operating costs are one of the driving factors for many companies, leaving states with high taxes, regulations, and other costs.

This is a complicated situation with multiple layers to consider, so here’s my take based on your questions:If you’re looking to move assets from the partnership into individual LP (Limited Partner) names while avoiding capital gains, you’ll need a strategy that complies with tax regulations.

Are there any rules, laws, or regulations regarding this?

Hey @Caprice Watkins, so Sheboygan does have some STR regulations. 

There is a lot more state regulations and lending laws change when 5 units or great.

Definitely follow the regulations in the area and if permissible I would offer to attempt to find an acceptable tenant and terminate their lease when that happens but in the meantime they will need to continue to pay.

In the last few years, they've made illegal:-Rent controls of any kind-Limiting of fees or screening charges-The ability of HOAs to regulate STRs or LTRs in their neighborhoodThat's just the start.

The primary risks at this point would be       1) to your lender, the risk of a margin call.       2) To you; underestimating the true cost of a project and cost overruns      3) To you; legal risk of securities regulations if you partner looses money. 

Also 4th quarter of last year Packwood and county officially did discuss potentially regulating STR's by either limiting numbers or adding a tax to cover increases in local services that are needed. 

Likely they will only allow you to live in the property once you refinance out of the debt due to rules and regulations, but you can always ask!