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Investment Info:Small multi-family (2-4 units) buy & hold investment in Independence.

Those who warn against it (and some will not do it) do so because of the potential for an IRS audit and the risk of negative consequences from the audit.1.  

Something holding period can less than that will qualify if you truly converted your rental and defend if audited.  

I had my accountant come in and do an audit of my books and found that they were using my money to buy supplies and do repairs for other properties they managed. 

I've found some good resources for prefab and modular spaces for both workshops and larger dwelling spaces. www.studioshed.com (I don't work for them or benefit financially, i'm just a fan) is the one i'm leaning toward as we have a nice sized yard, South Beacon Hill, with an independent alleyway for access and parking and we can get the build for $80k including kitchen and bathroom, all electrical components, doors/windows etc (I would have to put it all together or hire someone to do that) but not incl permits, site work, utility connections and foundations.I've been quoted in the range of $260-360K for a complete package with a design build service which is out of our league but the DADU' presented do look awesome. 

At the same time, what you're saying contradicts what I have been told by the accountants for several of these funds (including one audited by CohnReznick...which I looked up and is the 11th largest accounting firm in the U.S.).

So I have 12000 miles that I kept track of for going on trips to the store/to see tenants/ ect for this tax year of 2018.My concern is is that too many miles that could trigger a audit?

Before condemning your property manager audit the market to determine if your rent is actually below market levels.

We are not perfect, nor are we the best lender for every investor, but no one 'loses' a deposit.Also- to address the local lender question, we use 2-3 independent evaluators in the immediate area to help us determine the profitability of a deal.