Recommend having an attorney review it to confirm.If the PMA has legally expired, then the PMC is in the wrong - although they may still have claims for covering the legal expenses.

Hey Santosh,As of right now you're extremely exposed regarding insurance and I'm going to assume legally as well.If the home isn't registered as a legal multi-family with the town that's something you'll have to correct ASAP and make sure the home is up to code.Insurance wise as soon as they find out what you're doing they'll cancel you as the risk has changed from a single family owner occupied home to a multi family owner occupied home.

Legally, my investment is now depending on Aloha's action.

Perhaps if your partner was a general contractor or handyman type there may be some merit there to reduce costs / increase profitability.If your partner enjoys deal sourcing, a better move might be for him to become an agent - so he could legally collect commissions from finding deals and managing properties for multiple people. 

If that does not go in my favor I may need to seek legal counsel.

As long as we would be legally allowed to proceed with this plan, then the question remains, as you point out, what is the tax burden for the partial 1031 exchange.

A law degree does not mean you know anything re wraps.If worse comes to worse, you can stop the foreclosure with legal action - it costs some but you will not lose your equity.I would not throw the baby out with the bath water re doing wraps and I do hope all works out for you.Reach out if you need a referral to a good AZ attorney to helpBe careful out there guysAlan Not to be too blunt, but you are handing bullets to a six year old with a gun.

And as far as legal—an attorney becomes essential once you're ready to finalize terms with either an HML or private lender to make sure everything’s secure.Hope this helps!

A 2 +1 is a legal 2-family with a boarder unit that can be lived in by the owner, usually without a stove and you want to make sure the bathroom is permitted.I hope that helps.

.- Also, you need a legal way to take back the deed if buyer defaults!