Most agency loans will expressly forbid such an arrangement, so if they found out, the odds of having the loan called would be very high. 

Are you saying that the IRS-1065 Is going to be pulled into an audit, or will just the disgruntled partners IRS-1040 be pulled in for the audit?

In most cases, the rehab money is interest free until you actually draw the money and if you never actually draw the funds, you won't owe the money when you go to pay off the loan.

Kind of piggybacking off this same notion but I have a permitted shed in the back of my duplex that would make a great studio apt. 

@Antoine Black  In general, yes, it goes off your personal credit. 

If you’re In a title state make proof of utility pay off a condition of closing.

Being out three months of rent plus $1,500, I'd be better off handing back their SD and forgiving the month of rent they couldn't pay.  

The most standout is the proximity to the school.

As already mentioned, you could sell via seller financing to lower AGI, as all you would have to claim is the payment income - until balloon payment received.Did know an investor that had 14 properties paid off and he moved into one every two years to then sell with the $250k single exemption.

We need the cash to mostly just tie us over untill we sell the property, so 150,000 is on the upper end; 80,000 and above would probably be sufficient.