Putting a MH on property would possibly work depending on what you could get the property price down to, but setup fees and transport fees may make it cost prohibitive.

Anyway, do I build two ADU’s on the property and essentially make it a 4 plex property, get the cal grant of 25k towards development, save money on permitting fees since the units will be exempt from impact fees (8k each if they’re under 750 square feet) have expedited permitting under the new law; and also save money on metering and utility set ups since they can tie into our main BUT be prohibited or ever separating our parcel and selling them on their own, (and we’d get about 1600 a month in rent off of each of them so we’d cashflow quite a bit)OR split the parcel to build two separate units that can be sold immediately after they’re constructed, but then have lots of extraneous costs like impact fees, utility fees, and not have the expedited approval BUT make a lot more money on the sale if I were to sell it, but have much less cash flow than if I build ADUs instead.Totally torn :( 

While I'm pretty sure investments and investment income are not prohibited, I'm don't see how you can run a home business that produces income and not call it income.

Are you talking about local town regulations that prohibit short term rentals or is it on the state level?

Even if you buy in that perfect area there is not guarantee that regulations won't change in the future to prohibit your STR business.As will all real estate it is advisable to have multiple exit strategies so if you can always "buy right" on any real estate investment you minimize the downside.

Compared to an IRA, Solo 401k contributions limits are roughly ten times higher.There is no custodial requirement for the 401k.You don't need the additional expense and administration of an LLC to have checkbook control.There is a built in-Roth component whereas IRAs are either traditional or Roth, not both.A spouse can also participate in the same Solo 401k plan.The Solo 401k has additional tax benefits over an IRA when investing into real estate using leverage.The penalties for prohibited transactions are less severe, though it's best not to utilize this benefit :)

Following are the similarities and differences between the solo 401k and the self-directed IRA.The Self-Directed IRA and Solo 401k Similarities Both were created by congress for individuals to save for retirement;Both may be invested in alternative investments such as real estate, precious metals tax liens, promissory notes, private company shares, and stocks and mutual funds, to name a few;Both allow for Roth contributions;Both are subject to prohibited transaction rules;Both are subject to federal taxes at time of distribution;Both allow for checkbook control for placing alternative investments;Both may be invested in annuities;Both are protected from creditors;Both allow for nondeductible contributions andBoth are prohibited from investing in assets listed under I.R.C. 408(m).The Self-Directed IRA and Solo 401k DifferencesIn order to open a solo 401k, self-employment, whether on a part-time or full-time basis, is required;To open a self-directed IRA, self-employment income is not required;In order to gain IRA checkbook control over the self-directed IRA funds, a limited liability company (Checkbook IRA) must be utilized;The solo 401k allows for checkbook control from the onset;The solo 401k allows for personal loan known as a solo 401k loan;It is prohibited to borrow from your IRA;The Solo 401k may be invested in life insurance;The self-directed IRA may not be invested in life insurance;The solo 401k allow for high contribution amounts (for 2016, the solo 401k contribution limit is $53,000, whereas the self-directed IRA contribution limit is $5,500);The solo 401k business owner can serve as trustee of the solo 401k;The self-directed IRA participant/owner may not serve as trustee or custodian of her IRA; instead, a trust company or bank institution is required;When distributions commence from the solo 401k a mandatory 20% of federal taxes must be withheld from each distribution and submitted electronically to the IRS by the 15th of the month following the date of each distribution;Rollovers and/or transfers from IRAs or qualified plans (e.g., former employer 401k) to a solo 401k are not reported on Form 5498, but rather on Form 5500-EZ, but only if the air market value of the solo 401k exceeds $250K as of the end of the plan year (generally 12/31);When funds are rolled over or transferred from an IRA or 401k to a self-directed IRA, the amount deposited into the self-directed IRA is reported on Form 5498 by the receiving self-directed IRA custodian by May of the year following the rollover/transfer.Rollovers (provided the 60 day rollover window is satisfied) from an IRA to a Solo 401k or self-directed IRA are reported on lines 15a and 15b of Form 1040;Pre-tax IRA contributions on reported on line 32 of Form 1040;Pre-tax solo 401k contributions are reported on line 28 of Form 1040;Roth solo 401k funds are subject to RMDs;A Roth 401k may be transferred to a Roth IRA (Note that from a planning perspective, it may be advantageous to transfer Roth Solo 401k funds to a Roth IRA before turning age 70 ½ in order to escape the Roth RMD requirement applicable to Roth 401k contributions including Roth Solo 401k contributions and earnings.)

NOTE: NJ standard form realtor contracts prohibit assignment, so make sure you have your lawyer address that in attorney review!

PROHIBITION: This agreement establishes a prohibition against transfer, conveyance or encumbrance to the property. _________________________________ _________ _________________________________ _________ Seller: Date Buyer : Date: _________________________________ _________ _________________________________ _________ Seller: Date Buyer: Date

Self-managing real estate can result in a prohibited transaction and leave you with all sorts of tax problems.