There can be specific issues that can cause the distribution to be taxable related to partners having enough basis / debt basis to distribute the proceeds. 

As an example, we decided to replace the windows in a house we were renovating and ended up costing us $50,000 extra because we got into issues with permitting and suddenly found ourselves having to hire an architect, speciality contractors, etc.  

I had constant issues with the local government and the taxes were absurd.

If you have a self directed IRA there are no tax consequences (but potentially various other issues), otherwise you will be subject to tax at the highest dollar rate as well as penalties if you are under 59.5 

The main downside is being dependent on the HOA—issues like poor management, rising fees, or unexpected assessments can hurt your investment.

Quote from @Jaycee Greene: Hi @Chloe Salcedo, welcome to the BP Forum and I'm sorry to hear about your medical issues!

If there is any issue I call plumber handyman.

I think communication seems to be the issue here especially with your comment on how the PM is unresponsive.

It helps to ensure everyone is on the same page and can save you headaches if issues arise.If you need further guidance on structuring these points or tailoring them for your project, feel free to reach out—I’d be happy to help you get started!

Another one was seller-financed for a few years before refinancing into a conventional loan around 2018, again no issues until this year.