Capital improvements do not include the following as set forth in the regulations: correction of serious code violations not created by the tenant; improvements or repairs required because of deferred maintenance; or improvements that are greater in character or quality than existing improvements ("gold-plating" "over-improving") excluding: improvements approved in writing by the tenant, improvements that bring the unit up to current building or housing codes, or the cost of a substantially equivalent replacement."

Had a company that AHS sent over last year that replaced a heater, no issues.Different tech this year, same subdivision, different property, same setup (no pressure reducing valves and no pressure tank), and tech claims it needs "Sediment trap, expansion tank, T&P modifications, and permit", essentially more than what AHS says the new tank itself is worth.Figured I'd ask here if anybody knows the exact regulations, because the tech seems not to want to explain anything other than "We can't tell you by law, only American Homeshield can, we've told them what it needs".

In my opinion, $200 per month, for a property in an extremely sought after area, with a tenant base that is extremely consistent, with military and government in the area not going anywhere, is a reasonable investment to stick with.I agree with @Russell Brazil, that you should hold the property in your portfolio.  

This means that you would comply with Regulation D, file a Form D and you would only be obligated to complete notice filings in the states in which you sold securities. 

@Kyle Titus @Collin Schwartz I'm fairly sure zoning laws govern new builds and are generally not applicable to converting the interior of the structure to multiple units.

They might not hang around with government agencies showing up wanting to investigate them.  

Cashing out equity works against that effort.You should raise rents to what the market and local laws and regulations allow.

Keeping in mind that it would be repealed to less regulations now but more regulations than circa 2008, it hopefully finds that right balance.

The codes, regulations and zoning are prohibitive.

There are zoning requirements, which regulate such things as set-back and frontage.