Quote from @Jackson Ebersole: Hi Piper,It's always smart to flip properties in-state, and I'd like to share some updated insights on why this approach is beneficial, especially in the New Jersey area.Lenders typically feel more comfortable with in-state flips because:You can manage the rehab more easilyYou have better knowledge of local real estate trends and valuesYou can respond quickly to issues or make decisions fasterThere's a lower risk of fraud or being taken advantage of by distant partnersI can help you with recommendations for the New Jersey market:North Bergen: Continues to show strong potential, with average profits now around $150,000 per flip and a gross ROI of 85%.Willingboro: While specific flip numbers aren't available, the market remains active with a gross ROI now averaging around 130%.Gloucester City: Still a top performer, with gross ROI hovering around 180-190%, though still on smaller profit margins.Irvington: Home values have continued to rise, with a 20% increase over the past two years.East Orange: Has seen steady growth, with home values up by about 16% since 2022.Paterson: Experienced a 14% increase in home values over the last two years.Additionally, Jersey City and Newark have emerged as promising markets for flips, with strong appreciation rates and growing demand.

Additionally, it was unusually dry, with only .13 inches of rain recorded during monsoon season.Nevada Leads Nation in Online-Dating Dangers: Nevada ranks as the most dangerous state for online dating due to high instances of identity theft, romance scams, and fraud.

I just don’t want to commit either lender or tax fraud in the process.  

You also risk:1) Committing mortgage fraud by misrepresenting the property and/or how you're using it.2) Exposing yourself to liability if the 3rd renter discovers they are in an illegal unit.3) Voiding your insurance.

I would be more worried about potential mortgage fraud in what you are trying to accomplish. 

Just be careful as you do not want to do anything that could look like mortgage fraud (fake master lease that just transitions over to you directly would be mortgage fraud and best to stay away from). 

He also used a lot of other questionable tax-dodging strategies like writing off high-interest loans to his kids, fudging numbers on the value of his properties to pay less taxes, then fudging them the other way to get loans, etc. etc. etc.... let's not forget his company was found guilty of criminal tax fraud.

An omission of a material fact known to the issuer that wasn't disclosed to investors could be considered fraud or misrepresentation, which is illegal in a securities offering.

I dont know if Don does land development deals but I am sure if he does not he will probably have a decent referral for you of a reputable lender lots of frauds out there as your probably aware.

That is considered mortgage fraud and is probably one of the highest forms of mortgage fraud that happen.