@Linda RobertsDid they sign a lease agreement for the new lease rate?

Ut with the 7% interest rate ??  

- Lower rates.

Also, please bear in mind costs; some states could have annual fees for an LLC in the hundreds of dollars (e.g., California),  whilst other states have no such fees (Texas).

Please note that I am not discussing the business idea or the rate of return because I am fine with both and don't want that to be part of the discussion.

This can involve public hearings and meeting specific requirements.Surveyor: Hire a surveyor to map the property and define the boundaries of each condo unit.Legal Counsel: Work with a real estate attorney to ensure all legal requirements are met and the condo conversion is properly documented.Financial and Operational Considerations:Condo Fees: Determine the monthly condo fees for maintenance, repairs, and other communal expenses.Insurance: Ensure proper insurance coverage for the condo association and individual units.Reserve Fund: Establish a reserve fund for future repairs and maintenance.Tax Considerations:Initial Purchase with 1031 Exchange: 1031 Exchange Basics: By using a 1031 exchange, you defer capital gains taxes on the sale of your previous property by reinvesting the proceeds into a new like-kind property.Down Payment and Financing: You're putting down $220,000 and financing the remainder at 8% over 20 years, resulting in a monthly payment of $2,593.Converting to Condos and Selling Units:Capital Gains Deferral: The 1031 exchange allows you to defer capital gains on the initial exchange.

I did not find it very useful and the monthly fee makes little to no sense.

With rates high, it's harder to cash flow when you house hack now, especially if you need a larger unit.

FHA loans on multifamily will likely have the self-sufficiency test for 3-4 unit properties and with current interest rates virtually every property is unlikely to pencil. 

I'm willing to bet dollars to donuts they pay below market rates.