Well if they dont comply, they will likely lose their license as well as have a huge liability for fraud, both civil and criminal liability, so yes they comply.

It's a duplex in a C class neighborhood.Below are the expenses:Purchase price: $94,000 (conventional financing 25% down w/ 5.375% interest rate)Total Rent: $1,250 (both units are identical 2/1)Taxes: $75Insurance: $8.33Vacancy: $125.00 (10%)Repairs: $63.50 (5%)CapEx: $63.50 (5%)Prop.

It is a fraud, and the old landlords would got penalized.

Don't pierce the corporate Veil: This can occur if the entity either is poorly capitalized.Inadequate Initial funding of the entityor fails to maintain a separate identity from its owners ( using the business bank account for business purchases, maintaining separate books)Conversion of entities Assets for Personal BenefitAnother factor that poses a risk of piercing the corporate veil is the draining of entities assets (such as payments of large salaries to shareholder-employees) that leaves the entity with inadequate resources to pay its debts.As you earn more income from flipping business, you should definitely elect to S-corp to save on SE tax. but if you are not making around 80k Plus, the benefits are outweighed by the complexity and expenses of maintaining it

@Sam Alomari Account Closed This seems like an identical post, but good information none the less (whoever came up with it) haha

Of course the laws never stop the crooks and the frauds and scammers.

The key is just to make sure the financing contingency covers you so you don't get accused of fraud. 

But Point Richmond is probably my favorite location wise, the views can be incredible.... and the houses still have an identity/charm.

LO said today it’s a fraud for him to write that rate lock in and $1300 credit in disclosures.

https://www.biggerpockets.com/forums/52/topics/499696-beware-of-fraud-by-erentpaymentcom