These tenants might find themselves a free (taxpayer paid) lawyer and end up owning your "good deal" buildings if the violation is bad enough.Also, get in touch with a local, experienced, LL/T attorney.  

Ordinarily, Sec. 469(g) allows a taxpayer to deduct any suspended passive losses attributable to an activity when substantially all of the activity is sold in a fully taxable transaction.

Clueless politicians using LL and taxpayer money to buy votes from freeloading tenants!

Lets dive into a few of the take-aways from our PVRP_RESIDENTIAL: Residential 1: $350,000 single family home with no debtMarket rents for properties like this are around $1800Operating expenses are relatively low, tenants pay utilities and i’ve a assume a owner/manager situation for all three scenariosNo debt, means no principle pay down, higher cashflow in dollars, lower After-tax cashflow return due to taxesProjected year 1 returns would be as follows for this illustration:Pre-tax Cashflow $13,070 (3.73%), Pre-tax + Pay Down $13,070 (3.74%), After-tax + Pay Down $12,749 (3.64%) and Total Return $22,551 (6.44%)Residential 2: $350,000 single family home with low leverage (50% Loan-to-value)Leave market rent and operating expense variables the same to maintain a like-kind analysisYou could theoretically buy two of these, so for illustration purposes multiply each return metric by 2Projected year 1 returns would be as follows:Pre-tax Cashflow $3,640 (2.08%), Pre-tax + Pay Down $6,999 (4.00%), After-tax + Pay Down $7,224 (4.13%) and Total Return $17,026 (9.73%)Residential 3: $350,000 single family home with moderate leverage (70% Loan-to-value)Again rent and expenses are fixedYou could theoretically buy 3 of these with your available capitalProjected year 1 returns would be as follows: Pre-tax cashflow -$132 (-0.13%), Pre-tax Cashflow + Pay Down $4,570 (4.35%), After-tax + Pay Down $5,014 (4.77%) and Total Return $14,816 (14.11%)The take away here are the fundamentals of leverage.Sheet 2, named PVRP_MULTIFAMILY will outline some current on-market opportunities.

@Jessica Singh, As long as they are married then their joint return is the tax payer - no matter who's name is on deed or whos name the 1099 is in. 

NC does have personal property tax, but I am unaware of anything that allows them to place a lien on property in which the taxpayer does not have an interest.

Well if you’ll be paying $600 more to your contractor(s), you’ll need the W-9 form to get the contractor’s taxpayer ID number and so you can issue the 1099-MISC form.

"(5)Limitation on deductions In the case of a use described in paragraph (1), (2), or (4), and in the case of a use described in paragraph (3) where the dwelling unit is used by the taxpayer during the taxable year as a residence, the deductions allowed under this chapter for the taxable year by reason of being attributed to such use shall not exceed the excess of—(A)the gross income derived from such use for the taxable year, over" - Found itThank you for the advice, and referencing the relevant IRC sections.There isn't a lot of guidance, and I was using the guidance given from the biggerpockets blog to calculate those expense ratios - so seems to me there isn't great consensus or just a lack of knowledge on this issue in general.Blog link: https://www.biggerpockets.com/blog/2016-02-21-tax-implications-house-hacking"If you have a single family home, you can either divide the room you occupy by the total number of rooms (rooms include beds, baths, kitchen, living room, dining room, etc.) or the square footage you occupy by the total square footage.You will now have a percentage of the home that you occupy and a percentage of the home that you rent." 

Any tax paying entity can do a 1031 exchange. 

Taxpayer hires equally qualified appraiser.