Typically its no Issue untIl you have to do an evictIon or when cIty fInds out.https://www.citybuildingowners.com/rules-for-new-york-city-basement-rentals/Read the article should have the details you are looking for..

Is it allowed from IRS rules?

@Robert ReineriAlso, certain distribution rules apply to solo 401k plan so you may not be able to take a distribution from the solo 401k plan unless you meet a distribution triggering event. 

@Linda MalavetThere is a special rule regarding taxation and collecting rent payments.Rent payments are normally taxed in the year collected.Therefore - I am not sure what the tax difference would be from having a 35 month lease vs a 36 month lease.

Not saying wages will support the housing prices or that it's even a winning proposition...

It also depends on what type of asset you're investing in (for example, MFH versus storage versus MHP), in what market, what is the investment potential duration, what is a potential value add (if one exists for a deal), whether it is offered via Rule 506 b or c and many more other variables.

I wouldn't rule out single families in the area if you know how to execute that strategy.

Try to include pictures and other evidence to support your claim.

I am making a list of "Safety rules" for tenants to get their acknowledgment via DocuSign  before the winter :)))

Using the 50% rule to estimate expenses, would the estimated cashflow be $283?