It is also my understanding that assets contributed to the corporation are contributed at cost basis, but if withdrawn, they are withdrawn at FMV which may create a taxable capital gain for the taxpayer.My understanding may be imperfect, but these issues certainly bear further examination.

Have you examined the lease agreements?

We are examining the multi-unit market in Austin, San Antonio, (I'll be there on the 4th), & D/FW .

We have their examiner working with the Stuart underwriter to see if they'd remove it.

Feel free to ask any questions you have.First you need to examine the 50% rule.

Your question seems to be asking how they would know because you want to follow that approach, which makes me pause....Since the bank is a loss payee on the hazard policy, yes, they will notice.They also notice names on tax bills being paid.They notice if there is an insured loss to the property.They may also notice someone else is paying the loan.They also audit loans, and bank examiners audit loans and occupancy can be verified easily.

Garbage comes in various shapes, and smells so examine the offering carefully.

It shouldn't just be seen as a single account/investment and then ditch it without first examining how it plays into your total financial picture.

If you examine the potential fines and penalties and weigh that against the cost of getting legal and compliant and doing so still doesn't make sense with any solution (there are at least 3 for different sized operations), then getting out may be the best option.

If payments are slow or in default the examination can go deeper.Then if it's discovered that you misrepresented things, you could have problems.It's irrelevant if you know of someone who lied on a mortgage/loan application or if you know someone who says they know someone who did, or the amount you put down, or good intentions, knowingly presenting false information or obtaining a loan by deceiving an insured lender is a felony.I suggest you seek other financing options, with your down payment there should be seller financing options available, partner with another, if you have a retirement account you might be able to change accounts and borrow from yourself, seek private investors, do an installment deal like an option to be financed in the future in 3 or 5 years later.