Worst case scenario you get serious damage or a lawsuit from a bite.I personally look at it on a case by case basis.

I am doing a BRRRR right now where I am living in the mother in law suite, while rehabbing, and will rent out the main house (3 bed 1 bath) when complete.

Wife and I are interested in creating a multifamily property, either through creation of an in-law suite, or maybe just building a nicer MFR property from the ground up for a house hack opportunity.Location agnostic at this point, just seeking info on people who have successfully did a new build of a small MFR property?

They will, and in today litigious environment thats a lawsuit. 2.

.), for which you should consult a knowledgeable CPA, but those revolve around shifting areas of taxation and deriving additional benefits.You'll want to do your flipping in an LLC (and if you plan on doing multiples, you should look into Series-LLC) for liability purposes (,  so that if a buyer of one of your flips comes back years after the sale with a lawsuit, you are protected).One way or another, the money gained from flipping is active income and you'll have to pay taxes for it.

A property owner in a HOA rented out his unit for STR, the HOA said no, a law suit came about, and the ruling was City law trumps HOA rules.Below is the link:https://www.google.com/amp/s/amp.vcstar.com/amp/90311826I have yet to test this case law.

@Andreas MirzaThe concern I have is the "sophisticated" investor definition in Regulation D under Rule 506 is subjective and really leaves the decision up to the court to decide if there is a lawsuit.

This why vetting upfront is so important.On the other hand, a larger contractor may have real assets in the company or even a reputation that they want to protect so they want to find away to avoid getting into legals which waste time and money for them.With respect to contract size, in reality anything under 100K is not worth a full blown lawsuit as the legals will eat you alive even if you win; small claims court may be your best bet if you are OK managing the process or maybe using a paralegal.On the emotional side, I strongly urge you to put that aside.

An ADA lawsuit from a patron is an unnecessary burden if you can avoid it.

Then there was the whole sequence of massive law suits resulting in the new tax code adjustments which were only finalized in 96.